American households are expected to dump $750 billion worth of stocks this year in favor of less-risky assets.
This is the first annual drop in demand since 2018, due to higher bond yields and lower savings, reported Goldman Sachs Group strategists, led by Cormac Conners and David Kostin, on March 22.
The strategists said that the era of TINA (“there are no alternatives” to stocks) is over and that the era of TARA (“there are reasonable alternatives”) has begun.
Goldman estimated that households will sell $750 billion in equities by the end of 2023, although the amount could jump to as high as $1.1 trillion.
If this year sees lower yields and a higher-than-expected savings rate, the dump in stocks could be little as $400 billion….