Are Stocks Overtaking Real Estate in Household 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 published by the Board of Governors of the Federal Reserve System (1998), corporate equity recently surpassed real estate as the largest asset for the household sector. This striking finding might lead one to conclude that the typical American household now has 2.2 children, a TV in every room, and a stock portfolio.