Stock Market Participation

For the past twenty-five years, roughly half of American households have had a personal stake in the stock market thanks to 401(k) retirement accounts, mutual funds, and the internet, which turned business news and investment media into a Main Street product and rendered the market our primary economic indicator. In 1989, less than a third of U.S. households had any holdings—direct or indirect—in the stock market. By 2019 that share had increased to roughly half.

This was an improvement, but it did little to slow the runaway train that is wealth inequality. The fact remains that nearly half of American households don’t have any stake in the stock market. Furthermore, the distribution of stock is enormously uneven. The wealthiest 1% of Americans hold almost half the stocks owned by households. The bottom 80% hold just 13%.

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Share of U.S. Households Invested in the Stock Market

Direct and indirect holdings

Sources: Federal Reserve, Survey of Consumer Finances.