Are Stocks Overtaking Real Estate in Household Portfolios

Abstract

The rapid growth of the stock market since 1990 has encouraged the view that corporate equity holdings are becoming the primary asset for a broad spectrum of American households. A closer look at the evidence, however, reveals that real estate continues to eclipse stocks as a share of most households ’ portfolios. A recent Newsweek article entitled “Why We’re Married to the Market ” observed: “Seldom, if ever, has Main Street been so enthralled with Wall Street. We have become a nation of stock junkies—splurging on mutual funds, scouring market tables, and studying personal-finance columns ” (Samuelson 1998). Journalists, policymakers, and observers from all walks of life have been taking note of the increasing popularity of stocks. To be sure, the commentators include doomsayers as well as optimists, but both groups readily agree that stocks have been booming. According to data