"What is the fair market value of a specific company" is only part of how stocks as a whole get valued. Roughly speaking, investors have a roughly constant frac

"What is the fair market value of a specific company" is only part of how stocks as a whole get valued. Roughly speaking, investors have a roughly constant fraction of their money invested in stocks. As more money enters their pockets - via personal earnings, corporate profits, monetary and fiscal policy, etc - investors have to figure out where to park it. What happened in 2008 is that investors suddenly realized that a hell of a lot of companies were taking way more risk than they thought, and decided to cut their stock allocation to avoid those risks.