This paper studies the role of detrended wealth in predicting stock returns. We call a transitory movement in wealth … we find that these trend deviations in wealth are strong predictors of both real stock returns and excess returns over a …. Why should wealth, detrended in this way, forecast asset returns? We show that a wide class of optimal models of consumer …

momentum to the income shares of households in the top 10 versus bottom 90 percent of the stock wealth distribution. We use a …, and show how the result can be explained if investors located in different percentiles of the wealth distribution exhibit …