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Rekenthaler Report

Have Stock Investors Become Smarter?

John Rekenthaler

Calm Waters
If the U.S. stock market were a white-water rafting trip, its participants would demand a refund. These days, even a 1% daily move by the Dow Jones Industrial Average is rare. Holding stocks is like tubing the American River: lazily drifting on a summer's day, all cares forgotten. I'm not sure how CNBC stays in business.

As Bloomberg's Matt Levine points out, this decline in market volatility could indicate that investors have become more rational. Robert Shiller won a Nobel Prize, in part, for showing that stock prices overreact.