The current study investigates the impact of substantial economic fluctuations on household portfolios and analyzes how the fluctuations influence households? propensities to meet the capital accumulation ratio threshold of 25%. The 1992 to 2007 Survey of Consumer Finances datasets were analyzed using means tests and a logistic regression. In periods when the stock market increased more than housing prices, the percentage of households meeting the 25% capital accumulation ratio threshold increased from the previous survey year but when housing prices increased more than the stock market, the percentage of households meeting the threshold decreased from the previous period. The patterns are consistent with households reacting passively to changes in housing and stock values rather than using the capital accumulation ratio guideline to adjust their balance sheets.

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