Many forces are driving this paradox. Despite an improving economy and rising stock market, skepticism abounds. Start with the secular shift in the economy, due to globalization and automation. This has made low- and medium-skilled labor vulnerable, as outsourcing eliminates many jobs in lots of industries. Add to that a middle class that isn't seeing any appreciable wage gains, and rising income inequality, and you have the recipe for lots of economic anxiety and unhappiness.
The fourth item was Robert Shiller’s column in Sunday’s New York Times, in which he noted that the common theme of major global recessions has been “contagious stories of wide significance. Basically, global recessions tend to begin when newly popular narratives reduce individuals’ motivation to spend money. Psychology matters a great deal.” This suggests to me that fringe sentiment -- combined with actual economic weakness -- could have an impact on economies.
What this reveals is that, as I like to say, investors must “curate their personal investment resources”: Learn who is insightful and trustworthy, and identify those whose advice results in losing money. It will save you time, not to mention heartache.