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Huh, total US retirement stuff about a year ago was ~$28T, and total US market cap at the same time was ~$30T. Now obviously there's not complete overlap there
by dmoy 7y ago
Huh, total US retirement stuff about a year ago was ~$28T, and total US market cap at the same time was ~$30T. Now obviously there's not complete overlap there, because a huge chunk of retirement accounts are not invested in equities at all, and a less huge but still significant chunk is not invested in US equities. However, that means that the remainder is still a massive chunk of all US equities.
I would not have guessed this, given the size of the average person's 401(k). My guess was much smaller. Not sure if I'm worried or relieved to be wrong about that.
- lotsofpulp 7y agoIt doesn’t matter if it’s equities or debt, once an assumption about growth in the future is made, then if it doesn’t come to pass, it is considered a loss. And who doesn’t like to make rosy assumptions about the future so that they can enjoy life today. Let’s assume 8% returns, so that we can save less and spend more now. Well...now you have to work harder to make those 8% returns come true. And the savers get screwed too because people (aka government) will opt to pump up the value of equities to make sure the 8% nominal return comes true at the expense of sacrificing the value of the currency.