There is only ONE legitimate reason or explanation for the rally in the stock market (even though when you adjust for inflation, we're still below out 2007 levels)
Of course, I don't credit the majority of investors (institutional or individual) or the majority of the money in the market with the intelligence to invest in stocks as a hedge against future inflation. The fact that future profits will have inflation adjusted into them automatically would require too much thought on their part.
But what is even more curious than a reasonless rally is the severe drop in trading volume amongst the world's largest exchanges.
Normally a rally indicates higher volume, but there are several reasons for this traditional rule to be broken. None of these reasons, however, bode well for your average investor.
High frequency volume trading automated by computers that manipulate the market (and still don't provide enough volume to offset the long term investment money).
A horrible distaste for investment left in the mouths of younger generations after a dotcom and housing bubble (not to mention no employment prospects and no money to invest).
Large hedge funds and institional investors swapping securities for diversification reasons.
But my favorite reason the article provides is "less volatility."
Since the financial crisis in 2008 the markets have become "less volatile" resulting in less people pulling out of the market, less people trying to time the bottom, and more money permanently staying in the market.
But ask yourself a question.
"How great of a reason is THE LACK OF VOLATILITY for a stock market rally?"
It once again is another desperate excuse, a desperate reason for stock markets to rally that once again ignores the only two things that should drive a true stock market rally -
1. Increased profits
2. Increased dividends
The fact volume is tanking, leaving a higher percentage of trading in essentially connected firms' hands, AND there has not been the increase in profits to bring the P/E of investments down to a sane level, means this is a rally only for the connected.
You might as well be a man trying to rationalize driving a VW Cabriolet by citing its fuel efficiency.