The matrix of liquidity created by this new era of efficient market trading is pushing stocks higher and higher. The risk premium has rightfully decreased. All of the stocks/sectors/and global markets are so interconnected/arbed/pairtraded that it has created a level of liquidity not dreamed of 10,5, or even 3 years ago. For example, take a small oil stock on the NYSE. Its stock price is now determined moment by moment by the price of XLE, OIH, XOM, SPY, FTSE, NIKKEI and arbed down to the penny. The price of this stock can't really deviate much from its correlated indexes. If it does black boxes swoop in to provide liquidity. More importantly, sellers and buyers of stocks understand this and trade accordingly and trade orderly in a manner so as to not get a bad fill versus the correlated indexes. No one buys 5k shares 10 cents away from market anymore when they know they can buy 500 shares 1 cent a way from market 10 times instead. A degree of risk that used to be present when long is now gone. There is always a buyer of every stock and more importantly you can count on other sellers to not sell in a stupid way. This makes a small cap stock almost as safe as a large cap. Often i see XOM moving more than some smaller names which is quite ironic. 5 years ago this was not the case and there was insane unexplained volatiitly in small cap names because of illiquidity. Now the market for these names is orderly and arbed down to the penny against the various indexes ect.