Net Worth Information
Shrinking Wealth
By Celia Chen
04/3/01 12:00 PM ET
source: The Dismal Scientist, http://www.dismal.com
Most households still place a small share of their assets in equities. According to the Survey of Consumer Finance, the average household has less than 25% of its assets tied up in stocks.
Bolstering the position of consumers is the fact that household balance sheets are still fundamentally sturdy. Net worth remains very high, and as a percent of disposable income, was 585% at the end of last year, which is not far from the peak at the beginning of last year and still well above the 470% average that prevailed during the 40-some odd years prior to the bull market's start in 1995.
Stock holdings declined from $11.9 trillion to $9.6 trillion, while real estate holdings surged by 10% to $12.3 trillion, the fastest pace of growth in nearly 15 years. Real estate managed to regain its position not only because of sinking equity prices, but also because of very strong house price appreciation, coupled with an increasing rate of homeownership.
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