There are two things you can count on when you watch the nightly news or listen to the news on the radio. You’ll get a weather report and, even though it may be brief, a stock market update. What’s strange about that? While the weather affects everyone, the stock market doesn’t. In fact, since the financial crisis hit in 2007, the stock market has become increasingly irrelevant to more Americans.
According to Gallup, 65 percent of Americans said they owned stocks either personally or jointly with a spouse in 2007. Currently, only 54 percent of Americans do, and that includes any ownership at all, even a single share or a few hundred dollars in a mutual fund.
Compared with last year’s survey, there’s been a small uptick in stock ownership. According to Gallup, in 2013 the number of Americans owning any stocks at all was 52 percent, the lowest level since Gallup began the survey in 1998. Incidentally, the high point for stock ownership since that survey was launched occurred in 2002, when 67 percent said they had some exposure to stocks.
While the number of Americans owning stocks is near the modern all-time low, a smaller number of people control an increasingly larger chunk of that stock. According to Edward N. Wolff, a professor of economics at New York University, the wealthiest 1 percent of all Americans owned one-third of all stocks held by U.S. households in 2010, while the richest 5 percent owned about two-thirds of stocks held by households. And Wolff believes those percentages may be even higher today, in the aftermath of the financial crisis.
Many Americans who lost jobs and watched the value of their homes plummet had little choice but to spend down savings and sell assets like stocks. It’s possible those people will return to the stock market, but in the meantime, those who held on to stocks in the past decade have benefited from a major market rally that has lasted several years, while those who could have really used a little extra income missed out.
Until a greater number of Americans own stocks, newscasters may consider whether they should automatically report on the stock market or whether they should talk about something far more relevant to the lives of most Americans, like wages or the unemployment rate.