And so it was. On March 9, the Standard & Poor's 500 index closed at 676.53 – a 12-year low. Since then, the market has been downright cocksure. The S&P 500 index is up some 135 percent – the fifth-strongest bull market since 1929 – giving Angel and others who invested at the right time a very healthy return. (Angel is still fully invested in stocks.)
With the S&P hitting record highs this spring, the market has erased all the trauma and financial turmoil of the past six years. And that poses a fundamental question for Americans from Long Island to Los Angeles. What is the market telling us?
Five years after one of the worst global downturns of the past century, after all, not that much has changed. Europe remains precarious financially, not to mention politically. The United States is mired in a period of slow growth and corporate caution. Even indefatigable China seems to have lost economic momentum.
Yet something has changed. The US stock market – that barometer of crowdsourcing long before the term was invented – is back. And it's telling anyone who'll listen: The fears of 2009 were overblown; the financial and economic risks that loomed so large have receded a bit. Yet the market is also delivering a more sobering message: Stocks can prosper when the Federal Reserve shovels vast amounts of 0 percent cash into the economy.
Market optimists cling to the first message. Pessimists focus on the second and ask: What happens when the Fed ends its support? Is this another bubble waiting to burst?