TINA: There Is No Alternative

DEFINITION of 'TINA: There Is No Alternative'

"There is no alternative," often abbreviated "TINA," is a phrase that originated with the Victorian philosopher Herbert Spencer and became a slogan of British Prime Minister Margaret Thatcher in the 1980s. Today it is often used by investors to explain a less-than-ideal portfolio allocation, usually to stocks, since other asset classes offer even worse returns. Such decisions by investors can lead to the "Tina Effect," in which stocks rise only because investors have no viable alternative.

BREAKING DOWN 'TINA: There Is No Alternative'

Herbert Spencer, who lived from 1820 to 1903, was a British intellectual who strongly defended classical liberalism. He believed in laissez-faire government and positivism – the ability of technological and social progress to solve society's problems – and thought Darwin's theory of "survival of the fittest" should apply to human interactions. To critics of capitalism, free markets and democracy, he frequently responded, "There is no alternative."

Margaret Thatcher, a Conservative, served as Britain's prime minister from 1979 to 1990. She used the phrase in a similar way to Spencer, responding to critics of her market-oriented policies of deregulation, political centralization, spending cuts and a rollback of the welfare state. Alternatives to this approach abounded, from the policies advocated by Labour to those in place in the Soviet Union. To Thatcher, though, free-market neoliberalism had no alternative.

After the collapse of the Soviet Union, American political scientist Francis Fukuyama argued that this view had been permanently vindicated. With communism discredited, he wrote that no ideology could ever seriously compete with capitalism and democracy again: the "end of history" that Marx promised had arrived, albeit in a different form.

The Tina Effect

A different usage has taken over among investors in recent years, referring to a lack of satisfactory alternatives to an investment that is itself questionable. For example, late in a bull market, investors might worry about a reversal and be unwilling to allocate much of their portfolios to stocks. On the other hand, if bonds offer low yields and illiquid assets like private equity or real estate are also unattractive, they may hold stocks anyway rather than going to cash. If enough participants think this way, the market can experience a "Tina Effect," rising gradually despite an apparent lack of drivers, since there's nowhere else for capital to go.