Many famous economists

Then there is the "there is no alternative" theory, aka TINA. It basically says that with interest rates so low, stocks are the only moneymaking game in town. Economist Paul Krugman has floated a version of this. And Shiller thinks it's plausible. "You have to put your money somewhere," he says.

refer to TINA to try to explain the rally in U.S. stock market since April 1 2020. Mohamed El-Erian doesn't appear to be a paid shill. He's the President of Queen's College, University of Cambridge and CEO of PIMCO from 2007-2014.

That’s because one of the driving forces behind the equity rally is the idea that “there is no alternative,” frequently referenced by its acronym, TINA. If bond yields move up more meaningfully, that might provide an attractive alternative to stocks.

Jeremy Siegel does too.

And with bond yields near record lows, there is no alternative to stocks, Siegel argued.

But CD rates has been under 2.3% since Jan 2010. The graph doesn't show earlier than this. Fed Funds Rate is below 2.5% since April 2008.

The Federal Reserve slashed interests to 0.1% on March 15 2020, but the aforementioned interest rates are historically pretty teeny. If TINA is true, wouldn't investors have reallocated to buying stocks way earlier than Apr 1 2020?

3 Answers 3


If TINA is true, wouldn't investors have reallocated to buying stocks way earlier than Apr 1 2020?

They did. If you look at the long time frame, the stock market had an unprecedented bull market for a decade, fueled to some extend by low interest rates.
Even in 2019 bonds where not really an attractive investment. Germany for example had already placed bonds with negative interest rates as far back as 2012. This is not negative after inflation rate, this is literally negative. While the US had slightly better conditions, this is going into the same direction. So, while your quotes suggest TINA is explaining the 2020 rallye it has already been there long before.

But TINA is actually a part of the rallye. In early 2020 people were pulling out their money from the stock market but what do you with the cash? It has to go somewhere and there simply was no alternative. So people started investing into the tech sector. After all, there is no better stimulus to Amazon than closing down shopping malls. As the tech stocks are quite heavy weight, they were pulling up the S&P 500. But this is only half of the truth. Many sectors were left behind (oil, tourism, industry) and are only now catching up as the end of lockdown measures is near.

  • I'd suspect that in early 2020, a lot of the money people were pulling out of the market was effectively going in a sock under the bed. (Or savings accounts &c.) That is, people weren't pulling out the money because they saw better investment opportunities, but because they feared a pandemic-caused economic collapse.
    – jamesqf
    Apr 13, 2021 at 17:21
  • Definitely. But this also means that there was a large amount of liquidity to re-enter the stock market when things started to look slightly less catastrophic. Like lockdown measures mainly affection the recreational sector and a lot less of the industry. And the tech giants surely were profiting, so they were an obvious choice when re-entering the market
    – Manziel
    Apr 13, 2021 at 19:50
  • Sure. I'm just pointing out that TINA doesn't really apply, because the money taken out wasn't really going to other investments (AFAIK, anyway), just to that proverbial sock. Which meant that the liquidity was there for people to get right back in once it seemed that the feared collapse wasn't going to happen.
    – jamesqf
    Apr 14, 2021 at 2:59
  • TINA is one of the reasons but it has been around already long before. If there had been a good alternative, people probably would not have reinvested their money right back into the stock market
    – Manziel
    Apr 14, 2021 at 7:28

I'd offer that over $3 trillion of stimulus money pouring into the economy and the stock market was the driving force of market gains:

Investors poured record $56.8 billion into stock-market funds as stimulus checks arrived.

Experts concluded that the initial CARES Act boosted the market considerably. Many people invested part of their stimulus checks in the stock market. Schwab saw a record number of new accounts opened and Robinhood saw daily trades increase 300% in March 2020, year-over-year.

  • They keep saying we haven't seen inflation yet from the stiumulus, but the run up of the stock and real estate markets seems to hint otherwise.
    – JohnFx
    Apr 12, 2021 at 15:41

If TINA is true, wouldn't investors have reallocated to buying stocks way earlier than Apr 1 2020?

They sure did and that's the reason why the stock market is so bullish and dangerously overvalued. A big driver behind this are retirement savings (which are mostly done on auto pilot)

As Social Security is being faded out (and/or gets eaten by rising health care cost) the next best viable options are taxed deferred retirement savings plans (401k, IRA, Roth, etc). Despite economists and the media constantly bemoaning the poor savings behavior of Americans, the total yearly contributions to IRAs alone is around a quarter of a trillion dollars each year.

Here is where TINA comes into play: all this money needs go somewhere. Bonds & treasury have negative real returns so stocks seem the only option with some growth potential.

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