Stocks May Be Headed For Yet Another Boom

What is prudent under one set of economic conditions can be a mistake under another. Over the past two decades, a booming housing market, high inflation, and thus attractive short-term interest rates have encouraged individuals to put their money into real estate and short-term financial assets such as certificates of deposit rather than stocks and longer-term bonds. Indeed, corporate equities, including mutual funds, as a share of discretionary financial assets held directly by households have shrunk from the roughly 40% of 20 years ago to about 18% today, a truly startling change.

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