Lackluster economic performance, continuing concern about debt in both Europe and the U.S., and other factors have been pushing the stock market down in recent weeks.
Another factor receiving less attention is the pending end of quantitative easing. Quantitative easing had the perverse effect of making stocks look good by making other investments look bad. Investors, consequently, invested in stocks because there was nowhere else to put their money.
Like steroids, quantitative easing provided artificial performance enhancement to the stock market. Now that it’s ending, prices are becoming more market based and, as a result, have generally been falling.
Bobby Bonds and Roger Clemens can relate.