Why are stocks going up?

bartelbe

I don't regularly look at my investments, I am the sort of investors who buys and then just sits on shares and index investments for the long term. However I had a look today and was expecting a sea of red, instead everything is up. Except any company involved with the airline industry, for obvious reasons.

i found this a little bit surprising, with the new lockdown in the UK and in other European countries. I would have expected the markets to have reacted and gone down? Is the increase due to the expectation the vaccines will soon get the economies of the world going again or is there no rational explanation for it?

Alistair31

These things happen

thegentleway

Markets are unpredictable. It would be more surprising if the markets had behaved as you had predicted!

bhjm

the stock market represents the future, not the present. 

Thrugelmir

bhjm said:

the stock market represents the future, not the present. 

Attempts to predict.  The future as always is uncertain. 

Username999

bartelbe said:

I don't regularly look at my investments, I am the sort of investors who buys and then just sits on shares and index investments for the long term. However I had a look today and was expecting a sea of red, instead everything is up. Except any company involved with the airline industry, for obvious reasons.

i found this a little bit surprising, with the new lockdown in the UK and in other European countries. I would have expected the markets to have reacted and gone down? Is the increase due to the expectation the vaccines will soon get the economies of the world going again or is there no rational explanation for it?

Because Billions of money is automatically put into the stock market every day by people via pension funds.
That money is used to buy shares.

Gary1984

Governments and central banks have been pumping Trillions into economies all over the world to keep things afloat. So there's a lot of money sloshing around and a lot of it finds itself being funnelled into the stockmarket. 

dunstonh

We have had the greatest ever financial stimulus poured into the global economy.  Its no wonder the companies unaffected or positively affected have gone up.

bhjm

Thrugelmir said:

bhjm said:

the stock market represents the future, not the present. 

Attempts to predict.  The future as always is uncertain. 

let be more precise and rephrase.
on the stock exchange you can see the future. Not what happening right now, thats why it is often felt counter cyclical to our everyday life.

masonic

bhjm said:

Thrugelmir said:

bhjm said:

the stock market represents the future, not the present. 

Attempts to predict.  The future as always is uncertain. 

let be more precise and rephrase.
on the stock exchange you can see the future. Not what happening right now, thats why it is often felt counter cyclical to our everyday life.

Clearly you cannot see the future. Otherwise companies would not go bust with a non-zero share price. Looking beyond individual companies and moving to stock exchanges as a whole, around 20th February 2020 markets were moving along as if 2020 was going to be much the same as 2019. The future wasn't seen on that occasion. Then markets overreacted to events, so the future on 25th March was about 15% better than the future on 23rd March, yet nothing happened between 23rd March and 25th March to justify the more negative vision of the future on the earlier date. Perhaps it is as Thrug suggests after all "Attempts to predict. The future as always is uncertain."

25_Years_On

When my national savings three year bond matures in a couple of weeks time should I go for a 0.5% instant access, a three year bond paying 1% or should I put it into my Vanguard VLS60 which even in this last year is up over 7%. I don't need the £9000 soon so it seems like a sensible choice. Same with many people who might see stocks as a riskier option but it's far better than getting little return elsewhere. Perhaps one day there will a crash which sticks but the long term risks seem fairly low.  Very low interest rates seem to be a big spur to people choosing stocks instead and so the money piles in and helps the markets rise.