Valuation-Informed Indexing #643: People Spend More When Stock Prices Are High

I’ve posted Entry #643 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called People Spend More When Stock Prices Are High.

Juicy Excerpt: But what if Shiller’s Nobel-prize-winning research is legitimate research? What if most of the stock gains of the past four years were just the product of irrational exuberance and did not possess any lasting economic significance? In that case, most of those gains will be going “Poof!” in the not-too-distant future. In that case, this woman should be continuing to live her life in the manner in which she was living it in the days before stock prices went insane. She should not be letting the irrational exuberance change her thinking about all of her spending choices.