US households will sell $750 billion in stocks this year

[nidena]

US households will sell $750 billion in stocks this year amid higher rates and sticky inflation, Goldman Sachs says

US households are pivoting away from stocks as the Federal Reserve continues to hike interest rates, and the shift could result in a $750 billion sell-off in equities this year, according to Goldman Sachs strategists.



A higher-than-expected savings rate and the rise in bond yields are leading the shift. Goldman economists forecast yields for the 10-year Treasury will rise 0.6% by the end of 2023, while personal savings rates will surge 0.8% in the same time.

[haapai]

I've clicked the link.

I've read the article.

I understood the meaning of every word in it.

I am a native speaker of English.

I couldn't understand the article.  I could not find meaning in it.  My biggest problem was not understanding whether the boffins were predicting net sales of $750 billion in stocks by US households this year or whether that was the total amount of equities that they expected to be sold. 

My secondary issue was with the projections that they seem to be doing.  I'm carrying a lot more cash than I used to and even considering reconstructing the CD ladder that didn't work out too well for me in the aughts.  However, there is a limit on how conservative I will get.  Bluntly put, a year's net income is the most that I will park in low-risk, low-return instruments.  Once I get there, and the author has no clue how close I am to getting there, I'll be back to loading up on equities. 

But mostly I am pissed about reading something in English and not knowing what is being said.  It's kinda like listening to aviation English or WHO-speak without having an interpreter nearby to point out that a statement that I just heard did not actually mean what it would mean in standard written English.  

I

[MN-Investor]

I guess I'm not surprised. People don't know what the near future holds. Their current stocks may lose value. Why not get rid of your losing stocks now and put the money into a 5% CD? Makes sense. Basically people are changing their asset allocation, moving away from stocks and towards money market and bond funds. Entirely predictable.

[Rukh O'Rorke]

Mar 25, 2023 0:38:13 GMT -5 MN-Investor said:

I guess I'm not surprised. People don't know what the near future holds. Their current stocks may lose value. Why not get rid of your losing stocks now and put the money into a 5% CD? Makes sense. Basically people are changing their asset allocation, moving away from stocks and towards money market and bond funds. Entirely predictable.

if that is happening like that - then there is going to be continued devaluation in the market.....so could be a very bumby ride up ahead....

So like when Elon Musk sells 3.8 billion of tesla stock....is that counting? He's a household


But how much is usually sold in a year? how much is bought? Idk, so is this different than usual and by how much?

[MN-Investor]

Stock sellers are only one half of the equation. There is ALWAYS a stock purchaser on the other side. That's just the definition of a stock sale.

If Musk is selling a million shares of Tesla, or however many, then buyers are purchasing those million shares from him. Of course, whether or not Musk made a profit or lost money on those shares is irrelevant to the purchasers. The million shares of stock is still issued and outstanding.

So the story above is merely a story about changing assets allocations. Individuals, as a whole, are reducing investments in equities while corporations, as a whole, will apparently be increasing their equity allocations. After all, the number of shares of stock outstanding remains the same. The only thing changing is who's owning them.