Gallup released a poll Thursday showing that overall stock ownership among US adults remains 8 percentage points below its pre-crisis level. But even as the crisis appears to have scared many Americans away from owning stocks, there are two demographic subgroups where ownership has held firm: Adults aged 65 and older and those with an annual household income of $100,000 or more.
The data is from Gallup’s annual “Economy and Personal Finance” survey, which asks US adults whether they personally or jointly have money invested in the stock market, including in individual stocks and stock-market funds such as 401(k)s and individual retirement accounts (IRAs).
Before the crisis, 62% of US adults said they owned stocks. As of April, that number has dropped to 54% - which is higher than last year’s reading, 52%.
That’s bad news for millennials and Gen Xers, because even though the main indexes halved in value during the aftermath of the crisis, they have since more than made up for those declines by rising to record highs. The S&P 500 is up more than 102% since the day Lehman Brothers declared bankruptcy.
The implications of the data are clear. Here’s Gallup:
“The stock market has performed well in 2017, but proportionately fewer Americans are benefiting from today's bull market than did so in bull markets before the financial crisis. The gains in stock values in recent years seem to have done little to persuade people who may have divested themselves of stocks to get back in the market."
“Nor has the recovery encouraged new investors to join the market. Although young adults are understandably less likely than their elders to own stocks, the percentage of 18- to 29-year-olds investing is down 11 points since before the financial crisis.”
While the poorest Americans have definitely borne the brunt of rising inequality, they aren’t driving the decline in stock ownership because equity ownership among low-income people has been low for years.
Instead it’s the middle- and upper-middle-income households that have largely driven the decline.
The aftermath of the crisis also appears to have had a lingering impact on Millennials and Gen Xers, who’ve had to grapple with tepid employment and a student debt load that ballooned to more than $1 trillion during their prime working years.
Rising equity valuations, which have been spurred on by the Federal Reserve and its unprecedented monetary stimulus, have certainly played a role in driving up income inequality in the U.S.
But Gallup noted that the aging of the baby boomer demographic may have also contributed to the disparity in ownership rates. Older workers were in their prime during the boom years of the 1980s and 1990s so it's more likely they had 401(k)s at work, leaving them with above average stock ownership.
Here’s Gallup’s data.