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US households have never been this exposed to stocks
196 sats \ 1 comment \ @GlobalMarketsInvestor 8 Jan Stacker_Stocks

US household equity holdings have surged to a record 47% of total financial assets.

This exceeds the 2000 Dot-Com Bubble peak by ~8 percentage points.

At the same time, the S&P 500 CAPE ratio rose to ~45, the highest reading since the 2000 bubble burst.

The two metrics have moved in lockstep for decades.

Both peaked together in 2000, followed by a -50% crash.

Both peaked again in 2007, followed by a -57% crash.

What's next?

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0 sats \ 0 replies \ @TheRationalBit 8 Jan

Historically, record-high household exposure suggests that the marginal buyer has already entered the market. But what happens when everyone is all-in? There are a few possible scenarios:

  • An increase in leverage to chase further gains, which drives extreme volatility.
  • Any further gains are essentially a reflection of newly created money rather than productivity.
  • Smart money begins to exit, searching for a better store of value.

While we’ve seen similar setups in 2000 and 2007, 2026 may offer a different outcome. A CAPE ratio hitting 45 is a clear admission that price has detached from earnings, but it also indicates that people are searching for a better store of value than the dollar.

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