Duhhh, it’s long overdue. Why is hasn’t already had a major correction makes no sense. I’m on the sidelines waiting to place my Put options.
I think the answer of why there hasn't been one is the massive move by companies and people into 401K and IRA accounts. There is a MASSIVE amount of cash going into these accounts every year, keeping the demand up for stocks and bonds as an investment.
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Americans held $10.2 trillion in all employer-based DC retirement plans on June 30, 2023, of which $7.2 trillion was held in 401(k) plans. In addition to 401(k) plans, at the end of the first quarter, $580 billion was held in other private-sector DC plans, $1.2 trillion in 403(b) plans, $420 billion in 457 plans, and $794 billion in the Federal Employees Retirement System’s Thrift Savings Plan (TSP). Mutual funds managed $4.5 trillion, or 62 percent, of assets held in 401(k) plans at the end of June 2023. With $2.6 trillion, equity funds were the most common type of funds held in 401(k) plans, followed by $1.3 trillion in hybrid funds, which include target date funds.
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Then add in the IRAs:
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IRAs held $13.0 trillion in assets at the end of the second quarter of 2023. Forty-two percent of IRA assets, or $5.5 trillion, was invested in mutual funds. With $3.1 trillion, equity funds were the most common type of funds held in IRAs, followed by $1.0 trillion in hybrid funds.
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Total US retirement assets were $35.4 trillion as of March 31, 2023, up 3.5 percent from December 31, 2022. Retirement assets accounted for 31 percent of all household financial assets in the United States at the end of March 2023.
www.ici.org
So a total of 23.2 Trillion dollars, that people want somewhere that will produce good returns and usually invest in mutual funds, i.e. stocks.
And more pouring in every week. Since many who have already retired had regular pension plans, the retirement funds have been growing.
However, it's going to be interesting to see what happens as the people my age are retiring and beginning to pull out money vs adding it. If the economy starts dropping, then as people lose their jobs or have to stop their 401K withholding to pay bills we may indeed see a HUGE correction as the flood of people pulling more from their accounts is not balanced by investments going in. In the last three years, the Net Contributions for 401(K) plans has gone negative, while the pension plan contributions have been negative for years. So there is more going out than coming in. A little recession could make that a flood all those that own that 17 trillion try to keep their value by selling off.
It's coming. Just might not be as soon as we think. But it will be big... I'm serious considering getting out now while it's high.