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To: Lightning who wrote (13937)	6/29/1998 10:16:00 AM
From: Amelia Carhartt	Read Replies (1) \| Respond to of 116767

Good point Lightning: Many people today think of their investments in the stock market as savings. The day may very well come when they find out the hard way; equity investments are not savings accounts. Susan

To: Lightning who wrote (13937)	6/29/1998 10:20:00 AM
From: Henry Volquardsen	Respond to of 116767

That is pretty much what I meant. The savings rate remains low and is largely a shift of investment assets to equities. But it is associated with the aging of the baby boomers. It is also not really a shift but more a huge portion of new savings being directed towards equities. Think of it this way. The baby boomers are now in their peak earning years and even though the savings rate is low it is being applied at the top of their earning power. When they were in their twenties and thirties the prime investment vehicle was to purchase a home. Now that they are in their 40s and 50s the homes have been purchased and the investment shift is now towards equities. That is why the demographics are causing such a shift into equities. It has more to do with the natural cycles of individual earning history than it does with a concious decision to move from real estate to equities. As the leading edge of the boomers hit their 60s we should see another shift towards defensive investments such as bonds. BTW it is also worth pointing out that the dramatic increase in equities as a percentage of household assets is partially a reflection of the increase in prices we have seen over the last 10 years. This marked up the value of existing investments without a major rise in real estate prices, the other major asset households. So without any new investment in equities we would have seen an increase in the percentage of assets held by households just to reflect the price increase.