About 93% of U.S. households’ stock market wealth is held by the top 10%.
Why it matters: This stat — first spotted in the FT — is a crucial bit of context to keep in mind amid the heavily hyped surge of smaller retail investors who flocked to the stock market during and after the COVID crisis.
Details: While it’s true that a record high 58% of American households do own stocks via mutual funds or as individual shares, in the aggregate the amount of stock most of these folks own is tiny.
The big picture: Despite the trauma of the last few years — the collapse of stocks in the early days of the pandemic, and the brutal bear market brought on by the Fed’s rate hikes over the last couple of years — the stock market has soared over the long term.
- In the last 10 years, the S&P 500 gained 155%, and the tech-heavy Nasdaq rose a whopping 250%.
Between the lines: While bullish surges like those are welcome to pretty much all investors, the fact is that the majority of […]
This demonstrates what we have long known: The stock market is divorced from the real economy. Mainstream media focuses on the performance of the stock market and are then astonished that the commoner thinks the economy is doing poorly. This also sets up the dynamic where the commoner cares nothing for the corporate indicators of wealth as they have little to do with their daily reality.