Valuation-Informed Indexing #579: Is It Good Public Policy to Prop Up the Stock Market?

I’ve posted Entry #579 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Is It Good Public Policy to Prop Up the Stock Market?

Juicy Excerpt: The market should be permitted to price stocks properly, which it cannot do if policymakers knowingly promote policies that they believe will keep stock prices up. So, no, policymakers should not prop up the stock market. If anything, at a time when prices are above fair-value levels, policymakers should promote policies that will bring stock prices down to levels closer to their fair value. I can not recall ever hearing a policy advocated on grounds that it will bring stock prices down. I think that’s unfortunate. We should all want stocks to be priced properly. When prices are too high, we should all at least generally favor policies aimed at bringing them down.