Alan Greenspan phrased it as “irrational exuberance”.
Also, most Americans’ tax advantaged retirement accounts (via 401Ks) are locked in with consistent contributions to diversified index funds or ETFs containing primarily large market cap companies that make up a majority of the stock market.
There is certainly a bias towards long positions due to these dynamics, but wouldn’t you expect this to be at least reflected in derivative markets? The way I understand it is, if there was such a simple correlation, someone smarter and more equipped than me would already be betting on it at enough scale for the information to be integrated into prices.
If you can reliably make accurate predictions, then why on earth would you be talking about it instead of making the correspond bet via some combination of securities?
Not saying I agree with the parent comment but the reason would be because the concept of the efficient market is overly simplistic nonsense?
It is really a great example of how much human knowledge is really just the repeating of a standardized, agreed upon orthodoxy that has little to do with reality. In the 21st century the "expert" in various forms reinforces the orthodoxy far beyond the 20th century.
Economics can't even catch up to the 1980s and dynamic systems.
