Has Market Behavior Changed Permanently?
Josh Brown argues that the recent pattern in market behavior is a permanent change. While I don't agree, his observations are valid and explain the market action of the last few years.
There is some academic research that indicates the Central Bank addition of cash to the global markets has created a permanent support to the stock and bond markets. The reason is that the institutional money managers (banks, insurance companies, pension funds, mutual funds, etc.) do not change their asset allocation and closet index. So, a massive injection of cash without equal selling means the markets go up. I will post more on this later.
Robert Lloyds, CFA®
Chief Investment Officer
Lloyds Intrepid Wealth Management
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