The Democratization Of The Stock Market That Never Happened

By Heidi Shierholz, Economic Policy Institute— Despite minute­-by-­minute dissection of the stock market in the news media, the share of the population of the United States owning stock is surprisingly low.

Even when including shares purchased indirectly through retirement accounts, in 2010, less than half (46.9%) of all households had stock holdings.

Overall American investment in the stock market surprisingly low.

Less than a third (31.1%) had stock holdings of $10,000 or more.

The imbalanced distribution of stock assets has persisted over time, as seen in the figure below from the newly released State of Working America, 12th Edition.

The wealthiest 1% of households has never held less than one­third of all stock wealth.

Since 1989, the top fifth of households consistently held about 90% of stock wealth, leaving approximately 10% for the bottom four­fifths of households.

This figure shows that the vast “democratization of the stock market” since the 1980s—wherein the masses gained significant shares of the market through investment vehicles such as mutual funds, IRAs, and 401(k)s—never actually happened.

The Stock Market Ownership Society That Isn’t

Stock market wealth