It is a measure largely of the risk aversion of investors, not that of corporate managers. An increased appetite for risk by investors, for example, is manifested by a shift in their willingness to hold equity in place of psychologically less-stressful, but lower-yielding, debt. 5  Stock prices peaked in March 2000, but the market basically moved sideways until September of that year.
6  Some have asserted that the Federal Reserve can deflate a stock-price bubble--rather painlessly--by boosting margin requirements. The evidence suggests otherwise.