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The party is the same but the reasons are opposite—wild optimism boosted the market in 1999 as investors threw cash at anything followed by “.com.” But today, pessimism surrounding global markets is leading investors to chase dividends.
Back in 1999, dishing out large sums of money on tech was encouraged. Clicks overruled cash flow. But today, cash is king. "Nobody seems to be particularly optimistic about much of anything [today], and yet the stock market in the US seems to do nothing but go up,” GMO co-head of asset allocation Ben Inker says.
In both cases, the market rises. The difference is the increase is justified today, the Wall Street Journal reports, as stock prices are at their highest when people are pessimistic about the market. That’s because people are more likely to save, which pressures the economy by pushing down interest rates, which in turn boosts shares. [WSJ]
