What can actually stop the bull market? Even the corona pandemic only led to a temporary slump in the stock markets. The stock exchange long ago shook off the crash in March – many stocks are trading at record highs or are just about to hit it. The stock market is immune to sharp falls in the long term. For investors, dips are one thing above all else: first-class buying opportunities. Why is it?
Interest in the basement
The central banks reacted just right during the crisis by flooding the markets with cheap money. In this way, they have prevented the global economy from collapsing. A turnaround in interest rates is ruled out until the economy has noticeably stabilized. Especially since a number of countries, for example in the euro zone, are so heavily indebted that paying higher interest rates would break their necks. The upheavals in the euro crisis in 2011, when Italy had to shell out over seven percent for its 10-year government bonds, are still fondly remembered. Investors reacted in panic, and share prices plummeted.
Thanks to the ultra-loose monetary policy, there were no such distortions during the corona crisis. The key interest rates in almost all major economies are now at or near zero. As a result, bonds are not worth mentioning from a yield perspective.