Since the start of the great recession in 2009, two things have happened in the stock market:
- In the short term, events have occurred that correlate with declines in the stock market
- In the long term, the stock market has steadily improved significantly
This leads me to two conclusions
- Always take a longer term view of the stock market
- The things that drive the stock market in the long term are very different than the short term drivers
The second conclusion is something that this piece tries to tackle: Gradual Improvements Go Unnoticed. It is easy to see what drives the stock market down in the short term: it is difficult to ascertain what drives the stock market up in the long term. Gradual improvements could be a contributor. Other things, like the activity of the central bank, affects this. Even how other markets in the world in the world can affect the stock market.