MoneyBeat: Markets' Best Friend: Miscalculation
Investors like to debate whether the bull market is unloved, but one thing is clear: It has been misunderstood.</br></br>Since markets began rebounding in 2009, money managers repeatedly have misjudged the risks of inflation, higher interest rates and market volatility. They also have underestimated central banks' ability to keep the world economy intact.</br></br>All this misunderstanding has been disconcerting for investors, but terrific for stock and bond performance.</br></br>"A recovering economy with low interest rates and low inflation is probably an ideal backdrop to make money in financial markets," said Jack Ablin, chief investment officer at BMO Private Bank, which oversees $66 billion.</br></br>Moreover, when people are skeptical they hold money out of markets, avoiding the excess optimism that can kill bull markets. And as the doubters gradually give up and put money into stocks and bonds, "it just helps propel the market," Mr. Ablin said.