Generation Z Is Getting a Harsh Lesson in Stock Risk

There are many culprits to blame for the falling stock market, including policy errors that contributed to inflation, overexuberance, or just the very human tendency to forget that sometimes risky markets fall. But even in a perfect world, bear markets are a fact of life. Stocks don’t offer any guarantees of a return, and they do fall from time to time. “Risk” is the operative word in the risk premium on stocks; that’s why they usually return more than bonds. But what is concerning is that after years of a bull market and a few rounds of government cash payments, some households may be overexposed to risk, holding more stock than before and in riskier portfolios.