U.S. households at the moment are holding 80% of their wealth in equities — an all-time report. That’s larger than the 2021 peak, and even above the heights of the dot-com bubble.
On paper, it feels like buyers place confidence in America’s future. However beneath the floor, it’s a harmful focus few acknowledge.
Even those that assume they’re “balanced” with a 20% bond allocation aren’t getting the security they anticipate. The correlation between shares and bonds? 99%. Which means each transfer collectively — up in good instances, down in unhealthy.
So, in actual phrases, most buyers at the moment are successfully 100% in shares. They simply don’t understand it but.
The Knowledge No One’s Speaking About
Alan Hibbard breaks it down merely: U.S. family wealth has by no means been extra tied to the S&P 500. And when a single asset class dominates your monetary life, even small cracks can have devastating penalties.
Historical past exhibits how fragile “paper wealth” will be. After the 2000 dot-com crash, the NASDAQ fell 78% and took 15 years to get well. The Nice Melancholy? An 89% plunge that took 25 years to make new highs.
However right here’s the issue: current market rebounds have conditioned buyers to anticipate on the spot recoveries — six months after COVID, 18 months after 2022, and simply six weeks after 2025’s mini-correction.
As Alan warns, “The market is coaching you to imagine each dip will bounce — till the one comes that doesn’t.” And when that occurs, you may not dwell to see the restoration.
Shares vs. Gold: Which One’s the “Poser”?
At first look, each shares and gold are hitting all-time highs. However Alan poses the uncomfortable query: Which one is actual, and which one is an phantasm?
When adjusted for inflation — or for gold — the image adjustments dramatically. Gold has outperformed the NASDAQ over the previous 5 years, gaining 112% versus the NASDAQ’s 98%. Silver has achieved even higher, hovering 177%.
So whereas paper valuations look spectacular, the “actual” retailer of worth — measured in ounces, not {dollars} — tells a unique story.
As Alan places it, “One among them is sincerely making actual all-time highs. The opposite is generally an phantasm.”
The CAPE Ratio and the Subsequent Massive Bubble
To grasp how stretched markets have develop into, Alan seems on the CAPE ratio — the cyclically adjusted price-to-earnings ratio tracked by economist Robert Shiller.
Traditionally, the CAPE ratio has exceeded 40 solely throughout moments of utmost hypothesis: the late Twenties, the dot-com bubble, and now — September 2025.
When valuations attain this degree, future returns are likely to collapse. Each prior peak was adopted by a decade or extra of underperformance.
Mix this with political strain on the Federal Reserve and report authorities debt, and the parallels to the late Nineties — and even the Nineteen Seventies — are arduous to disregard.
The writing is on the wall: we’re probably residing by way of one other fairness bubble in disguise.
The Dow/Gold Ratio: The Sign Few Buyers Watch
In case you actually need to perceive long-term worth, Alan says, you need to measure shares in ounces of gold — not {dollars}.
That is the place the Dow/Gold ratio is available in. It tells you what number of ounces of gold it takes to “purchase” the Dow Jones Industrial Common.
In 1999, that quantity was 44. At the moment, it’s down round 12 — and falling. Traditionally, every time the ratio has peaked, it’s taken many years to get well.
After 1929: 30 years to get well in gold phrases After 1999: nonetheless not recovered — and sure gained’t for one more 20+ years
The takeaway? You can be holding “wealth” that appears secure in greenback phrases however is definitely shedding worth in actual, tangible phrases.
Gold’s Quiet Power in a Fragile System
In instances like these — when each shares and bonds are transferring in lockstep, and valuations are stretched past cause — gold and silver provide one thing uncommon: independence.
They don’t depend on central financial institution credibility or Wall Avenue optimism. They merely are.
As Alan places it, “You may’t sit in a single asset class to your total investing journey. It’s a must to have a look at how one asset compares to a different — and ensure you’re on the correct facet of the long-term cycle.”
For him, which means proudly owning gold and silver. For others, it means asking arduous questions on what’s actual worth — and what’s simply paper guarantees.
Time to Rethink “Diversification”
The “80% downside” isn’t only a statistic. It’s a warning — one which historical past has given us many instances earlier than.
When everybody’s on one facet of the boat, it solely takes one wave to capsize it.
In case your portfolio leans closely on shares, that is the second to step again, rethink diversification, and take into account the property which have endured each cycle for over 5,000 years.
Folks Additionally Ask
Why is 80% of U.S. family wealth in shares an issue?
When 80% of family wealth is tied to equities, portfolios develop into dangerously uncovered to a single asset class. Even buyers who maintain bonds aren’t actually diversified — inventory–bond correlations at the moment are about 99%. Alan Hibbard explains why this focus might spell bother in his video, The 80% Pink Alert for Shares vs. Gold & Silver.
Are shares and bonds nonetheless good diversifiers for one another?
Not anymore. In at the moment’s surroundings, shares and bonds transfer virtually in lockstep, that means conventional “balanced” portfolios don’t provide actual safety. That’s why buyers want to gold and silver as impartial, non-correlated property.
Has gold actually outperformed the inventory market lately?
Sure. Over the previous 5 years, gold is up about 112%, outperforming the NASDAQ’s 98%, whereas silver surged roughly 177% in the identical interval. Hibbard breaks down why these metals are quietly main whilst shares hit report highs.
What does the CAPE ratio say about at the moment’s inventory market?
The CAPE (cyclically adjusted price-to-earnings) ratio has reached ranges seen solely throughout main bubbles — the late Twenties, 1999, and now 2025. Traditionally, such readings sign overvaluation and weak long-term returns forward.
What’s the Dow/Gold ratio and why does it matter?
The Dow/Gold ratio measures what number of ounces of gold it takes to “purchase” the Dow Jones Industrial Common — a key indicator of actual, inflation-adjusted worth. When the ratio falls, gold is outperforming shares; when it rises, shares lead.
