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Undoubtedly, the 2021 bull market is the same one that started in 2009, with one major change. Advertisers, who have been sidelined for years, rushed after an accident that caused an epidemic last year and have survived. buy any dip with rising interest. It does not represent a new group of investors but a new voting group, which increases the risk of large-scale immigrants if one of the routines changes into a bear market.
Keep in mind that legislators played a key role in initiating this process. With government checks and new central bank checks, new investors began pouring part of their money into the markets, which helped the bull reach its 13th year.
More than 15m American downloaded marketing software on the epidemic, and research shows many of them are young, first-time buyers. Retailers have also been growing in Europe, doubling their daily sales volume, as well as in markets coming from India to the Philippines.
All told, US investors alone poured more than $ 1tn into businesses worldwide by 2021, tripling their previous record and over the past 20 years. Going back a decade ago, US families took over businesses as the biggest contributors to the financial crisis in 2020. They now have 12 times more shares than hedge funds.
Media coverage tends to rise sharply during the most difficult times, such as during Robinhood most people was going gaga for GameStop and other meme shares this winter, but the craze is not over. The “interest rate” of retailers, tested by the internet search for well-known market and real estate issues, has continued to rise. US households bought a surprising amount for the whole of 2021, up from a third quarter while their share price rose 16 percent over the previous year. The level of this new movement is similar to that of the past, which was established in 1963.
Unfortunately, back to the downturn of 1929, one of the well-known features of the bull market is that traders take it too late. Today, it continues to buy even though companies are selling more, with domestic sales continuing to exceed $ 60bn this year. And the insiders have a different reputation: they like to sell at a premium. When the market reverses, the fact that top executives moved to reduce their risks over time only exacerbates the anger among small investors who did not.
Instead of warning of advice, Democrats and Republicans, in a showing double bonding, praised the “democracy” of the markets and defended the right of Americans to think freely on meme bars – even though it seems absurd.
Another sign of trouble coming on the market is the heavy borrowing to buy stocks, or medium-term loans. The total debt in the US now stands at 2 percent of GDP, the highest increase since history began thirty years ago. A big part of it is in the stock market: their mortgage lending rose by 50 percent last year to record rates, as was the case before the 2001 and 2008 crashes.
Market democracy would be a fairly stable one, if the risks were handled wisely. Big players have never been a cornerstone of “smart money”, and this may be more true than ever, as online marketing has the potential to gain market knowledge for all types of investors. Merchants are not the only ones who show signs of mania, which is also seen in the markets for IPOs, combined with graphic design.
But many retailers are investing their money the most imaginative way, for example when buying one-day elections or stocks with low value that are easy to raise. It is a sign of turbulent times to hear prominent political leaders defending the threat of capitalism by a group of investors that includes low- and middle-class voters.
The result is a market that is historically valuable, rich and perhaps unparalleled, capable of burning politically. Americans now have more savings and the share of their assets in stocks is now equal to the regular rate, going back to the 1950s.
None of this indicates an impending danger. There is a lot of money going around in the system and even the leading investors are worried that there is no other way to get stocks with very low interest rates. But after doing more to boost the interest of retailers, governments and central banks could face a major challenge when the next bear market arrives.
The author, Morgan Stanley Investment Management’s chief strategist global, is the author of ‘The Ten Rules of Successful Nations’.
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