In past valuation posts, I’ve occasionally shared the following two charts. Ned Davis Research (NDR) charts the Federal Reserve’s “U.S. Household Asset Allocation” data. Below is the charted history of stock, bond and cash percentages. Stock ownership is currently 55.83% of a “Household’s” asset allocation (upper section of next chart).
NDR looks at that stock allocation number (55.83% today) and they then do something really cool. They analyze the history of the percentage in stocks and plot the returns an investor received 10 years later.NEXT CHART