Why US stock ownership remained at static levels

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To be sure, the Fed’s Survey of Consumer Finances data is from last year. To the extent that equities have continued to move higher since then, it’s possible that stock ownership has gone up since the end of 2013.

At the same time, while the Gallup data and the Fed’s survey data show declining stock ownership since the peaks in 2000 and 2007, Americans still own far more stock than they did in the late eighties and early nineties when equity investing was just becoming more widespread.

In addition, when you look just at the first decade of the millennium, equity holdings appear more static. Despite two market crashes during that period, the share of investors holding stocks barely cracked.

stock ownership

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Market Realist – The graph above shows the percent of U.S. adults invested in U.S. markets (SPY) (IVV). The ownership remained in the 50–60% range in the last decade. The investor holding of stocks hasn’t decreased drastically—despite the stock market crashes during the technology bubble burst (XLK) of 2000 and the U.S. financial crisis (XLF) of 2008.

All the major broad market indices like the S&P 500 (SPY), the Dow Jones Industrial Average (or DIA), and the NASDAQ (QQQ) have been in an uptrend in 2014. The S&P 500 has been giving returns of more than 8% year-to-date (or YTD).

Continue reading the next part of the series to understand what’s keeping the stock ownership levels stable.

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