If the stock market is our mother, she says, “There, there. Everything’s goings to be all right.” The market is not actually our mother, but that’s what it seems to be saying. Everything is going to be all right. The market finished July just three percent away from the all-time record high set on February 17, 2020, just before the truth of COVID-19 hit investors. A disease that drove U.S. GDP down by 32.9%, and world GDP down by probably a comparable amount, seems not to bother the stock market.
The stock market reflects views of the future, not the current situation, and investors seem to think the future looks good. Or at least good enough to justify owning stocks rather than other assets, such as bonds or real estate or cash. And