Re: Correlation between real estate and stock market
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You are right. But the question is how much wealth do consumers have invested in various things. Do average Americans have 10 trillion dollars in commodities? Or is it mostly in mutual funds and in real estate? For the average American, real estate and stocks are the main investment vehicles.
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You are forgetting to account for the actual distribution of wealth!
The vast majority of wealth is held by a relatively small group... lets call them the top 10%... and thus in $$$ terms, a vast amount of $$$ is allocated to investments other than the stock market or real estate.
Additionally, beyond 1st home purchases, relatively few people actually invest in income producing property. Certainly much less than the number of people who have 401Ks.
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