NEW YORK (AP)—Nearly everything has come up a winner for investors this year.
Stocks are bumping up against peak levels. Bonds are making money despite a raft of predictions to the contrary at the start of the year. Stock markets overseas, notoriously poor investments for much of the last decade, are perking higher. Even gold, which typically glitters brightest when other markets are struggling, is up this year.
If it feels precarious to have so many investments doing so well, particularly when the economy itself is still growing only modestly, markets are giving few indications of worry. The volatility index that traders use to measure fear in the U.S. stock market hit its lowest, as in calmest, level last week since 1993. And stocks have been so strong for so long that investors have been rewarded for using any dip in prices that does happen as an opportunity to buy low.
The latest example is the pullback for big technology stocks that began just over a week ago. Apple, Facebook and other technology giants that had been among the market’s biggest stars slumped, seemingly on the simple worry that their runaway success had made them too expensive. But the rest of the market has held steady through the mini-bout of tumult, and the Standard & Poor’s 500 index is just 0.3 percent below its record.
Analysts pin much of the credit for the upsurge in markets on all the stimulus that central banks have thrown at them. By keeping interest rates low and buying trillions of dollars of bonds, the Federal Reserve, European Central Bank and others have helped lift prices for bonds. And when bonds get more expensive, it makes stocks and other types of investments more attractive in relative terms, even if their price tags no longer look cheap at face value.
That has some contrarians worried about what will happen when central banks move away from stimulus. The Federal Reserve raised rates again at its meeting on Wednesday, and it’s talking about paring back its bond investments this year. Mom-and-pop investors seem relatively unfazed for now. They have been plowing cash into stock and bond funds this year, but concerns are bubbling up elsewhere.