On the other hand, there is confidence that the stock market value will continue to expand indefinitely. Investments in the stock market have always involved a certain amount of risk. The other side of the story is that the rewards have, on the whole, been greater than investments with less risk. This should help one to make good decisions and avoid costly mistakes. Earnings have shown double digit gains because of a strong economy.
Inflation eats into profits and weakens the market due to higher borrowing costs.
Interest rates will stay steady as long as inflation remains low, thus money stays in stocks and mutual funds and out of treasuries. The economy should continue to grow, but at a slower pace due to less demand for cars and other goods.