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April 2, 2022 | Another Train Wreck in the Making

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel (www.venablepark.com) Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog: www.jugglingdynamite.com

Below is the chart showing the present 46% allocation of household net worth to equities, versus just 15% to bonds and 16% to cash. This level of risk-concentration to equities was seen at the 2000 tech bubble top and, to a lesser extent, the 2008 bubble top. However, allocations to the least risky bonds and cash are lower today than those previous risk cycle peaks. As a result, household net worth is heavily exposed to the downside of a bear market and recession. It is especially precarious because unemployment will rise as equity and housing prices fall—another train wreck in the making.

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April 2nd, 2022

Posted In: Juggling Dynamite

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