Stock gap: American's Stock Holdings at 18-Year Low -- (Wealth Gap Effect Widens)

[KoKo]

Last edited Wed Sep 10, 2014, 04:53 PM - Edit history (1)

The widening gap between the wealthy and the rest of America during the recovery can largely be explained in one word: stocks.

According to recent data from the Federal Reserve , America has the lowest level of stock ownership in 18 years. Yet stock ownership for the wealthy is at a new high-and that has accounted for most of their good fortune compared to the rest of America.

The Federal Reserve Survey of Consumer Finance found that only 48.8 percent of Americans held stock either directly or indirectly in 2012, the latest period measured. That's the lowest level since 1995, when 40.5 percent of Americans held some form of stock. (Indirect ownership of stock includes stocks held in mutual funds, 401-K plans and other investment vehicles.)The survey said only 14 percent of Americans own stocks directly-down from 21 percent in 2001.

But even more than most assets in America, their ownership is highly skewed toward the wealthy. Fully 93 percent of the wealthiest 10 percent of Americans own stocks. That's nearly twice the level for the middle 50 percent and far more than the 26 percent stock-ownership rate for the bottom 40 percent.

Stock ownership is even more concentrated when it comes to share of total stock holdings. In 2010, the latest period available, the top 10 percent of Americans by net worth held 81 percent of all directly held or indirectly held stocks, according to Edward N. Wolff, an economics professor at New York University who specializes in inequality and Federal Reserve data.

Wolff said that share-which has not been released yet for 2013-has probably gone even higher than 81 percent since 2010.

"The stock ownership rate for Americans peaked in 2001," he said. "It's been going steadily downhill since then."

And that, he said, has widened the wealth gap between the top 10 percent and the rest of America.

The flip side of the data is that those who have stayed in stocks-whatever their wealth level-have generally done the best in the recovery. The mean value of stock holdings for those who held them hit $269,000 in 2013, up 18 percent from $228,000 in 2010 and up from $137,000 in 1995.

Among the top 10 percent, the mean value of stock holdings soared to $975,600 in 2013, up from $834,800 in 2010. For those whose net worth puts them in the bottom 20 percent to 40 percent of Americans, the mean value of their holdings rose to $51,000 from $44,000 in 2010.

CNBC at:

http://finance.yahoo.com/news/stock-gap-american-stock-holdings-151221092.html

[House of Roberts]

1. The result of the boom-bubble-bust cycle.

The markets tank, and those without deep pockets are forced to sell at a loss, trying to save their home, or just to keep eating. The deep pockets scarf everything up at pennies on the dollar, and get to ride the market back up during the recovery.

I watched an employer go to liquidation auctions during the first Bush recession. He doubled the size of his business during that time.

The wealthy don't need or want long slow periods of stability. They profit from recessions.

[Wellstone ruled]

2. If your earning power

is limited,then your buying power is limited. It's just plan common sense,all of this hand wringing by the wealthy is plain bullshit. Interest Rates are extremely low for the 1%ers,but,for you and I,we can't attain these rates,maybe a mid 4% on a mortgage with 20% plus down. Other than that,6 plus for anything else. You just don't leverage capital at these rates and purchase equities that are being manipulated to produce for the retail mom and pop buyers,maybe,4 to 8 percent on a annual basis. You have to be in the very upper middle class to have extra cash to buy stocks out right. Yes there are some who are buying equities on small incomes,but,their household expenses are minimal at best.

This continuation of the Rethug theme,crash the economy is all about transferring more wealth to the 1%ers. Same story just another decade in our nations history. Yes we do repeat these patterns because people vote against their best interests,it's called propaganda. 1984 redux,continuous war,continuous poverty,and continuous hunger.

[fasttense]

3. And the rich get richer

The whole purpose of capitalism is to steal from the poor and give to the rich.

[blkmusclmachine]

4. The 1% is doing just fine, thank you very much.

Everybody else?

Well...

[Doctor_J]

5. Strange since Forbes' "greatest economic president in history" is at the wheel

and I say this as one of the Americans lucky enough to have the means to own some mutual funds.

1. It's not fixed yet
2. It's not heading in the right direction yet