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I hate headlines like this. Unless you cash out of your holdings you don't lose anything. Likewise, you also don't gain anything unless you cash out. The mor

by mikece 4y ago

I hate headlines like this. Unless you cash out of your holdings you don't lose anything. Likewise, you also don't gain anything unless you cash out. The more scary part is that a large portion of the population doesn't understand the difference between paper wealth and liquid assets.

superb-owl 4y ago
The thing is, people make purchasing decisions based on their paper wealth. They use it to plan their retirement, or decide their price range for a new house. Shrinking household wealth destroys confidence in the economy, and can lead to a serious feedback loop.
- the_arcadian 4y ago
  Exactly. It shows up the most in discretionary big ticket purchases. When the market's down you'll buy the same number of bags of doritos as you used to, but you're more reluctant to buy a new car or redo your kitchen.
- pessimizer 4y ago
  Not for you, but for lurkers: https://en.wikipedia.org/wiki/Wealth_effect https://en.wikipedia.org/wiki/Wealth_effect
dickersnoodle 4y ago
This is USAToday, the king of "out of context". Household wealth is "only" $143.8 trillion down from a record $150 trillion with most of what's in the article talking about the stock market. Get a grip.
- jt2190 4y ago
  It’s a Reuters
  - jt2190 4y ago
    [Somehow clicked reply without posting my full comment. Here it is:] It’s a Reuters story [1] republished in U.S. News and World Report. [1] “U.S. household wealth suffers record drop in second quarter”, September 9, 2022. https://www.reuters.com/markets/us/us-household-wealth-falls-again-second-quarter-fed-says-2022-09-09/ https://www.reuters.com/markets/us/us-household-wealth-falls...
MerelyMortal 4y ago
If you're retired and planned on cashing out, what are you supposed to do? Not cash out and live on nothing, go back to work, or cash-out and just not buy everything you wanted?
- CogitoCogito 4y ago
  > and just not buy everything you wanted? Isn't that how it always works?
- s1artibartfast 4y ago
  Every reputable advisor will tell you to move into more stable assets the closer you get to retirement. Sell your bonds to fund your lifestyle. If you have stock, wait until it bounces back. If you were gambling with your lunch money, you may be taking a hit.
dominotw 4y ago
Then there is no way to measure wealth at all, its just all a mystery.
water8 4y ago
Human behavior changes based on that very real number. The lower it goes, the less people feel like funding ideas

by mikece 4y ago

superb-owl 4y ago

The thing is, people make purchasing decisions based on their paper wealth. They use it to plan their retirement, or decide their price range for a new house. Shrinking household wealth destroys confidence in the economy, and can lead to a serious feedback loop.

the_arcadian 4y ago
Exactly. It shows up the most in discretionary big ticket purchases. When the market's down you'll buy the same number of bags of doritos as you used to, but you're more reluctant to buy a new car or redo your kitchen.
pessimizer 4y ago
Not for you, but for lurkers: https://en.wikipedia.org/wiki/Wealth_effect https://en.wikipedia.org/wiki/Wealth_effect

dickersnoodle 4y ago

This is USAToday, the king of "out of context". Household wealth is "only" $143.8 trillion down from a record $150 trillion with most of what's in the article talking about the stock market. Get a grip.

jt2190 4y ago
It’s a Reuters
- jt2190 4y ago
  [Somehow clicked reply without posting my full comment. Here it is:] It’s a Reuters story [1] republished in U.S. News and World Report. [1] “U.S. household wealth suffers record drop in second quarter”, September 9, 2022. https://www.reuters.com/markets/us/us-household-wealth-falls-again-second-quarter-fed-says-2022-09-09/ https://www.reuters.com/markets/us/us-household-wealth-falls...

MerelyMortal 4y ago

If you're retired and planned on cashing out, what are you supposed to do? Not cash out and live on nothing, go back to work, or cash-out and just not buy everything you wanted?

CogitoCogito 4y ago
> and just not buy everything you wanted? Isn't that how it always works?
s1artibartfast 4y ago
Every reputable advisor will tell you to move into more stable assets the closer you get to retirement. Sell your bonds to fund your lifestyle. If you have stock, wait until it bounces back. If you were gambling with your lunch money, you may be taking a hit.

dominotw 4y ago

Then there is no way to measure wealth at all, its just all a mystery.

water8 4y ago

Human behavior changes based on that very real number. The lower it goes, the less people feel like funding ideas