>The more likely scenario is the market is disconnected with economic conditions,
Also,
1) passive investment represents a much larger fraction of stock holdings than in previous decades.
2) a significant fraction of these passive investments are held in retirement accounts which cannot be easily liquidated.
3) another significant fraction is held by wealthy buy-and-hold investors which may never need to liquidate assets.
For the most part, I think the stock market is going to be stable for quite a while because there's really no viable investment alternatives. It's not like you can go into bonds because yields are basically nothing.
Now, if some rules are passed that allow for 401ks to be liquidated without penalty, then that might be a cause for concern.
Also,
1) passive investment represents a much larger fraction of stock holdings than in previous decades.
2) a significant fraction of these passive investments are held in retirement accounts which cannot be easily liquidated.
3) another significant fraction is held by wealthy buy-and-hold investors which may never need to liquidate assets.
For the most part, I think the stock market is going to be stable for quite a while because there's really no viable investment alternatives. It's not like you can go into bonds because yields are basically nothing.
Now, if some rules are passed that allow for 401ks to be liquidated without penalty, then that might be a cause for concern.