Kevin Carmichael – Stocks soar despite coronavirus and a recession. It’s time for a reality check, and a crash.
1 min read
Article by Kevin Carmichael. Photo of Sharon Epperson from video: How to maintain financial stability as coronavirus pandemic continues.
Psychological factors are making markets poor gauges of the U.S. economy’s strength. We should wrench our eyeballs from the ticker tape before it’s too late.
The business pages are full of explanations for why an economic calamity has been met with an epic rally in stock markets. But the commentary that might be most telling is that of a would-be investor who wasn’t alive when the previous downturn began in 2008.
“My 10-year-old son asked me if he can open an E-Trade account so he could buy Tesla stock,” Emily Roland, co-chief investment strategist at John Hancock Investment Management, told The Financial Times last month.
That a prepubescent child is asking to buy shares of Tesla, which have increased by about 340 percent in the last year, is a subtle indicator that something other than a careful study of economic fundamentals is driving stock prices. […]
