Household Portfolio Risk

We exploit the US Survey of Consumer Finances from 1998 to 2010 to study households’ portfolio risk. We compare alternative measures of ex-ante risk, based on a financial portfolio including deposits, bonds and stocks, or a broader portfolio also including real estate, business wealth and related debt. The measures provide different rankings of portfolio risk, but they all show a skewed distribution with many households bearing limited risk. Large wealth holdings lead to more aggressive risk positions. Moreover, risk falls at the beginning of the sample pe-riod and rises at the end, together with the business cycle