Investment Portfolios and Human Wealth

The optimal proportion of a household's investment portfolio that should be in risky assets such as stocks depends on what proportion of total wealth, including human wealth, the investment portfolio represents. This article estimates the total wealth of households in the U.S. Survey of Consumer Finances, and finds that financial assets represent less than 2% of the total wealth of most households. Only the elderly are likely to have investment portfolios representing a high proportion of total wealth