I feel that at the end of the day, retail investors need to understand two things: (1) prices of securities are based on markets EXPECTATIONS, and (2) the market expected outcomes are PROBABILISTIC.

There are billions of dollars circulating every day in the market trying to price risk and information. The prices that you see reflect the probabilities that the market assign to every possible outcome they can think of, and these probabilities can change drastically in an instance. To make matters worse, the market is made up of all sorts of people & ndash they range from the full-time portfolio manager/analyst who is modelling out every single item in the income statement/balance sheet of a particular company, to a 16yo kid who executes his trade based on reddit& rsquo s recommendations. However, at the end of the day, the markets collectively agree on a single price.

Prices move only when new information arrives, causing each market participant to shift their expectations and the probabilities they assign to each outcome. That is why it is not uncommon for prices to rise when economic growth is weak (perhaps they are pricing in easier monetary policy?), or prices to fall when economic growth is strong (perhaps it is inflation or monetary tightening they are pricing in this time). Likewise, I will not be surprised to see prices fall when a vaccine is truly found (inability to distribute vaccine? wars over vaccine supply?) nor will I be surprised to see prices rise under a prolonged lockdown.

Comments such as &   the market will definitely fall because of high unemployment and upcoming wave of corporate bankruptcies , the market will eventually recover when a vaccine is found , or & this is a dead cat bounce/bear market rally are just silly. Unless you go out there and gather information from the Buyside (hedge funds, asset managers, insurance companies), the Sellside (bank trading desks, research analysts), the flow of funds among investors, it is practically impossible for a retail investor to understand what the markets are currently pricing. And on what basis does a retail investor have to claim that the current market price is the wrong price?