Obviosly Dow 17,000 is on the wrong side of history

SAN FRANCISCO (MarketWatch) — Today’s bull market is the fourth biggest since the 1929 crash after stocks have nearly tripled since the financial-crisis low set in early 2009. 

But more than any modern bull market, this one stands alone in that it’s squarely out of step with economic growth. It’s being driven higher by just a few wealthy participants and traders who have tacitly, perhaps even unknowingly, agreed to drive prices higher. 

The main reason for that is two-fold. 

First, low interest rates have made other investments unattractive. The 10-year U.S. Treasury (BX:TMUBMUSD10Y -1.25%) is yielding only 2.62%. Inflation is running at an annual rate of 2%. That makes corporate bonds, certificates of deposit (which yield less than T-bills) and other fixed-income products largely a losing proposition. Those who have been buying bonds have been doing so for safety. 

Second, the investing public isn’t really buying stocks. A study by the Pew Research Center, published in May, found stock ownership by households is shrinking, at 45%, down from more than 65% in 2002. Even with the Dow Jones Industrial Average (DJIA -0.26%) reaching the 17,000 milestone, investors are leaving stock mutual funds, not buying them.