Just Half of Americans Enjoy Bull Market

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The stock market’s 19 percent climb in 2017 was nothing short of impressive. This year, it has gained another 6 percent.

This means that many boomers with 401(k)s are feeling a little more secure about retirement – at least for now. That more people feel they will be able to afford a vacation this summer with their children. And that Warren Buffett is getting richer even faster.

But one in two Americans isn’t at the party. According to the Survey of Consumer Finances in 2016, the Federal Reserve Board’s latest triennial survey and the most comprehensive look at Americans’ personal finances, 48 percent of U.S. families do not own equities.

Less surprising is how stock holdings break out at various income levels. About 30 percent of families with earnings in the bottom half of all incomes own equities, whether in the form of 401(k) investments, brokerage accounts, mutual funds, or individual stocks. For these lower-paid workers, the 2.5 percent average increase in hourly wages in 2017 is usually more meaningful. But inflation increased 2.1 percent last year, leaving them with just 0.4 percent more spending money, according to U.S. Bureau of Labor Statistics wage and inflation data. This is half of 2016’s inflation-adjusted wage gain.

In the next highest income group – from the middle-income level up to the 90th percentile – about 70 percent of families own equities in various forms. In the top 10 percent, the vast majority do (94 percent).

The chasm between the well-heeled and ordinary workers has been widening. Stock ownership is one prism through which to view that inequality.

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Ken Pidcock

My parents, solidly middle class, didn’t own equities. They would have thought it foolish. What they owned was a lot of U.S. Savings Bonds. Today, of course, we would think THEM foolish. The idea that the average worker must be invested in equities in order to secure retirement is relatively recent, and there are likely many households taking the lead of previous generations in avoiding volatile investments.


    You are spot on Ken. This bull market is a rare thing and it is not that easy to make money in the stock market, in spite of what the talking heads say. there will always be income inequality because we are not all equally gifted. To reap benefits like Warren Buffett requires a rare perspicacity.

    Better to be prudent and save regularly. By the way, some of those older savings bonds are still paying 4%. Although I agree they are currently not a good investment.


The USA could benefit by requiring some type of basic financial training for students in high school. The 401(k) offered by many companies is a great start but too many participants are risk averse in their early years of employment. The participants often do not understand the risk and reward dynamics of investing, let alone the value of compounding.

bob hunt

I have been telling people since 2008 to get back into the stock market; especially the S&P 500 Index Mutual Fund. But 90% of them have never gotten back into investing. Too afraid.

Paul Schervish

All who receive or will receive a defined benefit pension have their retirement future invested in equities through their pension plan. They too benefit from increased equity valuations. So look more into SCF and see what additional percentage have defined benefit pensions and add them to the percentage who have enjoyed bull market.

Paul Muther

Paul: I believe the amount paid under a pension plan is a function of salary (such as the average of the last five years of employment) and longevity (how long employed). It is not related to how well the assets in the plan are invested and hence plan beneficiaries do not benefit or lose from equities held in the pension portfolio. This is true, assuming the pension fund is in a position to meet its liabilities to beneficiaries as they come due, or, if it is not, the pensioner’s benefit is at or less than the amount “insured” (“guaranteed”) by the Pension Benefit Guaranty Corporation.


Articles like this usually don’t come out when there is a market downturn – say 10, 20 or 30%…etc.

There are too many general assumptions in the article. Yes, the “market” rose 19%. But what part of the market? Most people are not 100% invested in investments making 19%. Basic diversification means some are invested in investments making low single-digit rates of return.

If a person with lower income can’t afford to invest into the market – that may be a good thing. Putting more of that person’s money at risk with market volatility when the lower income person may need that money to pay off loans, purchase items now instead of building a big 401k balance for 25 years down the road.

When you start making this an income argument, it gets old and smells like politicizing something that shouldn’t be politicized. IF Warren Buffet is building up a bigger vacation nest egg, more power to him. There are legitimate reasons to argue against market participation for lower income or any income depending on the circumstances they are in.

Brett Layton

My grandparents were afraid of the market since the 1929 depression was a real event for them. My in-laws were anti-stocks for life. My parents were not as anti-stock but they did not have a lot of lifetime earnings. My mother fortunately supported my interest in stocks as a teenager and actually found me a stock broker (this was the early 1970’s). I earned a decent living as a tax CPA, but it was the market that made the difference.

I expect future returns to be much less than the ride we have just experienced. However, I am still in the market significantly. The funny thing is the longer you invest, the more risks you can take (provided you live a simple life).

It is truly a shame more people do not truly appreciate the power of compounding. However, if we all were investors returns would be lower. We get paid for delaying consumption and bearing risk (hopefully intelligently). I am no Buffet (nor a genius), but I am proof you can move up from working class if you get an education, work hard and have some luck and stay invested.


Gramps told me to spread my risk so I have 3 brokers. No extra cost since all charge 1% and fees of funds are based on shares/dollars. Give each a copy of all holdings each year & who has them. 1) Greed knowing I have more, they want more, leads to good service. 3) Pride gives good service too as they now know others are involved checking their advice. 4) BACKUP IN CASE ONE IS PROMOTED/DIES/MOVES or too busy with better-heeled clients. Started w/$2,500 in 1972 now $2.4 million. Works! Only get hurt if everyone does. Misery loves company.

John Dewey

Is inequality really that difficult to understand and accept? Delayed gratification must be highly correlated with both income and wealth. Those who sacrifice early in adulthood – delaying immediate income in order to obtain a higher education, while simultaneously putting off the joys of marriage and parenting – generally start off life with both higher early incomes and higher lifetime income potential. Further, those who enjoy consumption benefits from only a portion of current income will end up with larger nest eggs than those who live only for today.

Not sure why so many obsess so greatly on inequality of wealth. It is clear to me that the primary cause for that inequality is the amount of delayed gratification each individual selects. Would those who desire to end inequality of wealth be comfortable with restricting the freedom of individuals to make his own decisions about how much gratification to delay?

One could argue that socioeconomic class at birth determines lifetime wealth. But then it would be very hard to explain why so many from lower classes have achieved long-term economic success. Or why many who have inherited wealth have squandered it.

William Jhonston

I realize the stock market historically has always trended upward, but this gain in stock value seems particularly strong. What exactly is causing this long-term, “tremendous” increase? Do we know for certain?

I think it’s low interest rates for long periods of time?


“Since this is an era when many people are concerned about ‘fairness’ and ‘social justice,’ what is your ‘fair share’ of what someone else has worked for?”

― Thomas Sowell


I enjoyed the climb in the US stock market during 2017. Feeling invincible, I bought all time high crypto currency in late 2017.

Well, I guess you can’t win them all…

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