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As the stream of bad news the last year has continued to trickle in, week by week, you'd have no idea by looking at the stock market. Even major, once-in-a-generation events like the current oil crisis (although it has indeed caused some panic) has not materially moved the needle on the broader indexes. Yes, many individual stocks and industries have been hammered - but it's been fairly rotational and not a complete market meltdown.
My question is: why? As many people in this sub frequently allude to, we haven't had a sustained bear market since the '08 crash. In previous decades, crashes were much more common, whether it be the 70s oil crisis all the way to the dot com bubble. Is this a new era? Have we just been lucky? Are we facing down an imminent mother-of-all crashes and we just don't know when the shoe is going to drop?
I have some theories about what might have changed to get us here, including:
\- Market participants having a heightened focus on risk management and exposure in the wake of back to back crashes in the '00s, most commonly seen in big banks. Entire departments and software capabilities dedicated to making sure they have clear lines of sight into economic or market minefields. Risky products now are not the same as they were in '08, and even in the AI space, you can see constant "gut-checking" from large investors scrutinizing their investments to ensure they're not funneling money into a bubble about to burst.
\- A "buy the dip" mentality among retail investors that has permeated every sector and every downswing, with most people just believing "it'll always go back up, eventually", providing very solid price support that has helped avoid irrational panic selling. This flood of money is more engaged and active in the markets than ever.
\- Immediate access to (most) information everywhere - the world is so much faster and efficient at communicating now. Investors, from retail to fund managers, dissect every piece of data and news that comes out on social media. People are constantly up to date as events play out, slow or fast, which contributes to less of a "negative surprise" when things eventually do happen. Risks are analyzed in advance and priced in much faster than before.
I'm sure there are many other factors, but those are some that came to mind. And, obviously, much of that behavior can change at any time and cause the elusive crash people have been talking about for the last six years.
What are your thoughts?
Edit: It's been rightfully pointed out '22 was a bear market but I should have been more specific - I meant to ask why there hasn't been a more pronounced, long-lasting bear market similar to other historical crashes and downturns.