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Saturday, March 6, 2021

Data on Stock Ownership

From USA Facts
More Americans than ever are invested in the stock market. Data from the Federal Reserve's Survey of Consumer Finances shows that 53% of all US families owned publicly traded stock in some form in 2019. That is up from 32% in 1989. The median stock value held among households in the market was $40,000.


Between 1989 and 2019, the share of families with direct stock holdings actually fell from 17% to 15%. Instead, indirect investment was what drove the rise in total stock ownership, partly due to innovations like the 1981 Internal Revenue Service rules allowing 401(k) contributions to be deducted from paychecks; the 1993 development of exchange-traded funds; and the creation of Roth IRA accounts in 1997.


In 2019, only 15% percent of families in the bottom 20% of income earners held stock in some form, while 92% percent of families in the top 10% of the income distribution owned stock. Around 56% of families in the middle quintile — or the middle class — owned stock in 2019.

The gaps were even greater for direct stock ownership. Only 5% of families in the bottom quintile held stocks directly, while 12% of middle-class families and 44% of families in top 10% did.

Because income and net worth are highly correlated with race and ethnicity, there are gaps in the tendency to own stock between white, Black, and Hispanic families as well. While 61% of white, non-Hispanic families owned some form of stock in 2019, that figure was only 34% for Black families and 24% for Hispanic families. The relative gaps for direct stock ownership are even larger.