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Patrick Adams: When Stock Crashes Matter for Long-Term Investors | Rational Reminder 403

This episode features Patrick Adams, a PhD candidate at MIT, discussing his research on how high-income households manage their finances during stock market downturns. The research suggests that contrary to the 'stocks for the long run' mantra, many high-income earners are forced to sell stocks during market crashes due to inflexible spending commitments and volatile income, leading to significant financial losses. The discussion also touches upon how this impacts optimal asset allocation, suggesting a need for larger emergency funds and potentially lower equity allocations for working-age individuals.