Or, to put your comment more succinctly, the book talks about several variables as if though they are independent (e.g. market mid-term ROI, personal income, amount of leverage most brokers provide), but historically speaking these variables have always been heavily correlated.
the book talks about several variables as if though they are independent (e.g. market mid-term ROI, personal income, amount of leverage most brokers provide)
FWIW, the book does discuss the correlation of one’s income with stock market returns. They cite a study on this (from early in the 90s I believe) suggesting that most people’s income correlations with the market are between 0 and 20% (with many retail workers even having negative correlation with the market!). I was surprised how low those numbers where when I read that. I’d be curious to look into this more.
Or, to put your comment more succinctly, the book talks about several variables as if though they are independent (e.g. market mid-term ROI, personal income, amount of leverage most brokers provide), but historically speaking these variables have always been heavily correlated.
FWIW, the book does discuss the correlation of one’s income with stock market returns. They cite a study on this (from early in the 90s I believe) suggesting that most people’s income correlations with the market are between 0 and 20% (with many retail workers even having negative correlation with the market!). I was surprised how low those numbers where when I read that. I’d be curious to look into this more.