I personally know a lot of people, even some that can’t tell the difference between a stock and a bond, pumping money into the markets.
If you have a job and you can’t go out, you save a lot of money every month, what’s the best thing you can do with it besides expending it (can’t go out)? Investing!
Everywhere I go on the internet there are ads about opening a brokerage account and even some people that haven’t talked to me in years asked me how to open a brokerage account.
- Major market discount:
Buying at a discount is the best way to earn a high %. How many people have lost money buying the market when it is -20% or -30% and then hold?
- What else are you going to do with your money:
Bonds? How many of us actually have access to the bond market? Most retail traders only have stocks and options as financial instruments at hand.
- The Fed has your back:
No explanation needed here, they are pumping trillions into the (market) economy.
- The market is forward-looking:
Even if the real economy is in shambles today if you could invest right now knowing that the market will be 5 or 10% higher in ONE year, would you do it? Where else could you get that rate of return in one year?
The only reason not to invest today is that:
a) You think that the market will never go up again, or at least in 5-10 years
b) You think that the market is heading for a downturn and you want to buy at a discount, that requires skill to time the market (and it already happened back in March)
Maybe because there are a lot of retail participants right now the market may seem irrational, but it makes sense to me.
Thanks for reading.