U.S. equity holdings have surpassed real estate as a share of net financial wealth for the first time since World War Two, according to Goldman Sachs. The brokerage said equity gains have been the dominant driver of household wealth accumulation and the main contributor to a positive wealth effect on consumer spending. Equity allocations among U.S. and Australasian households are approaching 50% of financial assets, exceeding dot-com era levels, while households in Europe and Japan remain comparatively under-invested in stocks and hold a larger share of wealth in cash. Goldman noted that strong stock-market gains since the global financial crisis, particularly over the past three to four years, have increased equities' share of global financial assets, with technology stocks accounting for a growing portion of those holdings. The bank also warned that higher exposure to equities leaves households more vulnerable to a sharp market correction, especially when valuations are elevated and macroeconomic uncertainty is running high.
Goldman Sachs Group IncGoldman Sachs authored the report, but the article reports its analysis, not a direct impact on Goldman itself.