FYI: Yes, there's legitimate concern on corporate earnings about trade. Yes, higher interest rates on mortgages do seem to be discouraging new housing starts. But other fundamentals still look fine. Be wary. Don't panic. “Investors should not rush back in," Michael Strobaek, chief investment officer at Credit Suisse, told the FT as equities teetered yesterday, "but add exposure gradually in areas where value is most attractive.” Or in English, be wary. Don't panic.
Some people already knew this, though: high earners. Earlier this month Richard Curtin, who runs the University of Michigan's Surveys of Consumers, took a broad look at the survey's quarterly data on stock ownership. Three years ago, 61 per cent of households owned stocks. That's now at 65 percent. The survey also asks whether stocks will increase in value over the next year, and came up with an interesting result in the last quarter: the highest earners are the least confident:
Currently, only those households with stock holdings in the top ten percent of the distribution have expressed lower probabilities of continued gains in stock prices, from 66.4% to 57.8% in the 3rd quarter of 2018, indicating a greater sense of risk among top investors, which may presage a repositioning of funds toward safer investments.
Here's what that looks like:
The case for a fiduciary rule, in one graph:
Regards,
Ted
https://ftalphaville.ft.com/2018/10/25/1540489826000/The-problem-with-the-ownership-society/
