In 2012, in this column, we discussed a few stock market conspiracy theories. Investors, it seems, love conspiracies. Why? Well, psychologists would say that, when we can ‘blame something else,’ it is easier to accept the losses we experience in the stock market.
Whenever the stock market rises, U.S. President Donald Trump certainly seems to gloat and take credit. Having markets at a record would certainly help his chances for re-election next year. Bashing the Fed and pressuring it to lower interest rates certainly implies that he wants the markets to go up. And, he knows that a single tweet from him can move markets dramatically. Stock market bears say that the market is thus ‘artificially inflated’ and destined for a crash.
Peter Hodson, CFA, is Founder and Head of Research of 5i Research Inc., an independent research network providing conflict-free advice to individual investors .