Chart Of The Month ...

... from Tobias Levkovich, the US equity strategist at Citigroup Global Markets. Click on chart to enlarge, courtesy of Citigroup Global Markets.

And this comment is a good reminder on fallacy of averages:

While the relationship is clouded by discussions surrounding home prices and persistent unemployment, the divergences in income, wealth distribution and spending explains much of the disconnect. Since the top 20% of American income earners disproportionately account for nearly half of all discretionary consumer spending and they own roughly 90% of all equities, the stock market’s “wealth effect” is deterministic for the capacity to spend. With the S&P 500 up 19% from its June lows, high-end consumers are likely to buy gifts for friends and loved ones.

So, asset based thinking that substitutes real savings with asset price appreciation? Is there a downside to this approach?