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There is another useful inference. Adults own assets in the business and housing sectors. Older adults tend more to own debt claims on these sectors, and younger adults to own equity claims. But all adult ages collectively own both sectors collectively. It does not follow that the sectors are equal in risk, as older individuals might tend to own one sector predominantly, and younger ones the other. As a layman, I don’t really know. What I happen to know is that the publicly traded corporate sector, meaning stocks particularly but also bonds, is far more liquid than the housing sector, and that the rest of the business sector is far less liquid than either. Risk in general includes liquidity risk. This leads me to the hypothesis or hunch that the housing sector in general should be safer than the business sector, ceteris paribus, but that the publicly traded corporate sector, cap-weighting debt and equity claims on it, may be safest of all. The idea that stocks and bonds cap-weighted are safer than houses might have been laughed to scorn a few years ago. It doesn’t seem so funny after 2008. I view it as an idea to be tested, not trusted, until more is known. If it holds up, it will rank as another surprise. The effect of individual wealth on risk tolerance is less understood. Here I judge more from hunch and impression than from data. Given that human needs are fairly uniform, as with the private and the general, more wealth gives more insulation from want. Talent is wealth in human capital, and gives the same. Less, in either factor, gives less margin for error. My hunch and impression is that the wealthier in either factor should tend to be more risk tolerant so long as human capital itself is not put in harm’s way. Human capital operates physical capital, and gives the means of recovery. The wealthier, in talent or net worth, should prove the least tempted toward sky diving and Russian roulette. Chapter 2: Fast Forward 1/06/16 26 HOUSE_OVERSIGHT_010966