Surprise The Little Guy Ain't Participating!

Catherine Rampell, Economix, May 8, 2013

The stock market has been doing well, reaching new nominal highs in recent weeks. Economists have been arguing that such equity gains make people feel richer, which might encourage consumers to pick up their spending despite their stagnant wages and recent tax increases.

One possible problem with this hopeful story: the share of Americans who actually have money invested in stocks has been falling in recent years.

 

Source: Gallup. 

Selected trends are from surveys conducted closest to April each year. Most recent results are based on telephone interviews conducted April 4-14, 2013, with a random sample of 2,017 adults. The margin of sampling error is plus or minus 3 percentage points.

In its annual Economy and Finance survey, conducted April 4-14, Gallup found that 52 percent of Americans said they (personally or jointly with a spouse) owned stock outright or as part of a mutual fund or self-directed retirement account. That’s not statistically different from the share last year (53 percent), but is down substantially from pre-recession levels. It’s also the lowest recorded share since Gallup started asking this question in 1998. 

Lydia Saad of Gallup suggests that Americans’ withdrawal from the stock market may be “more a function of their ability to buy it, than of whether its value is soaring,” and notes that high unemployment seems to correlate with low stock ownership rates. . . .