This remarkable indicator just hit the second highest level in 55 years!
From Jason Goepfert at SentimenTrader: Investors are doing very, very well. The latest quarterly report on U.S. finances from the Federal Reserve shows that investors have done extremely well, and are now holding equities that valued at near-record levels compared to economic output and other assets. At the same time, pension funds are as exposed to equities as they’ve ever been, with the 2nd-lowest amount of cash on hand since the 1950s…
Investors Have Done Very, Very Well
The Federal Reserve released its latest quarterly report on financial assets in the U.S. on Thursday, and it’s no surprise that it shows investors have done very well.
The total value of equities held by households reached 86% of gross domestic product, moving to the 2nd highest reading since 1952, exceeded only by the second quarter of 1999 through the third quarter of 2000.
Equities as a percentage of total household assets remained about the same, not quite as extreme but barely so.
Private pension funds have 80% of their stock/bond/cash allocation in stocks, the highest since 2005- 07. As a result, their cash cushion dropped to 3.5% of assets, the 2nd lowest in history next to the first quarter of 2015.
While there is a certain amount of circular reasoning in using this data, it mildly suggests that stocks are as fully valued as they’ve been at any other point in 70 years, limiting the likelihood of substantial and sustained further gains.
This piece is just one example of why Jason Goepfert is the best in the world at what he does. The chart and commentary above are from SentimenTrader. To try a free 14-day trial of the internationally acclaimed work that Jason Goepfert produces at SentimenTrader simply CLICK HERE.
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