The wealthiest 10% of Americans own a record 89% of all U.S. stocks(cnbc.com)
cnbc.com
The wealthiest 10% of Americans own a record 89% of all U.S. stocks
https://www.cnbc.com/2021/10/18/the-wealthiest-10percent-of-americans-own-a-record-89percent-of-all-us-stocks.html
558 comments
What this effectively means is, that ten percent exercises majority control over huge portions of the US economy. That ten percent is the group making decisions on how to direct huge amounts of resources created by our economy. Such a healthy democracy.
Related: 61% of Americans paid no federal income taxes in 2020
https://www.cnbc.com/2021/08/18/61percent-of-americans-paid-...
https://www.cnbc.com/2021/08/18/61percent-of-americans-paid-...
With the advent of AI, wealth inequality is probably going to widen. Manual work is getting less and less valuable while ownership of the machines that do the work is getting more and more valuable.
I wonder if the wealth inequality is growing via transfer - aka "The rich get richer and the poor get poorer" - or if everybody is getting richer and the rich just get richer faster?
A good way to look at this might be some measure of the living standard / quality of life.
Over the last 10 years for example - did it go up for everyone? Or did it go up for some and down for some?
I wonder if the wealth inequality is growing via transfer - aka "The rich get richer and the poor get poorer" - or if everybody is getting richer and the rich just get richer faster?
A good way to look at this might be some measure of the living standard / quality of life.
Over the last 10 years for example - did it go up for everyone? Or did it go up for some and down for some?
Isn't that because normal people are heavily encouraged to put all their money into buying a house? Culturally ("rent is just throwing money away" / "the stock market is a casino"), with financial incentives (mortgage interest deduction, SALT deduction, Fannie/Freddy insured 30 year mortgages), and quality of life (school districting/social services or lack thereof), we get people to put every dollar they can into buying a house. Or more than one (apparently everyone aspires to be an amateur landlord). Consequently, you need to have a lot of money before you've bought enough house to move onto buying stocks.
If renting and investing were more normalized and encouraged, I'd expect a different ratio of real estate : financial asset ownership.
If renting and investing were more normalized and encouraged, I'd expect a different ratio of real estate : financial asset ownership.
Keep in mind that most people are their wealthiest at retirement age. People near retirement tend to have a lot invested. People under 30 make up 50% of the population - but will not be their wealthiest for another 30 years.
But in 30 years, those same people will also have significant amounts of savings (ideally).
Not at all saying that there are no issues with wealth distribution, or stock-ownership-distribution. But the top 10% aren't necessarily the "elites". They could also just be your parents.
But in 30 years, those same people will also have significant amounts of savings (ideally).
Not at all saying that there are no issues with wealth distribution, or stock-ownership-distribution. But the top 10% aren't necessarily the "elites". They could also just be your parents.
I expected an even more unequal distribution.
Owning stocks is risky, and stock portfolios are mostly bought with money people don't need to live on a day to day basis.
The poor simply can't afford stocks, and I expect the middle class to make different kinds of investment. Like property (buy a house), and low risk saving accounts that may be backed by stocks but the owner of the account is not the owner of the stocks. There may be a small part of gamblers who play the stock market like they are in Vegas, but I expect most stocks to be owned by very rich individuals or institutions, who can mitigate the risks by having lots of stocks, and also have some amount of control on the companies they invested into, rather than a millionth of a vote for small investors. Among the institutions are the ones that provide financial services to the middle class.
The poor simply can't afford stocks, and I expect the middle class to make different kinds of investment. Like property (buy a house), and low risk saving accounts that may be backed by stocks but the owner of the account is not the owner of the stocks. There may be a small part of gamblers who play the stock market like they are in Vegas, but I expect most stocks to be owned by very rich individuals or institutions, who can mitigate the risks by having lots of stocks, and also have some amount of control on the companies they invested into, rather than a millionth of a vote for small investors. Among the institutions are the ones that provide financial services to the middle class.
Perhaps this is a foolish question, but how do retirement accounts fit into this? I assume many of us have retirement accounts that own parts of mutual funds or ETFs, are those counted, or are the banks that managed those considered the "owner" and we're just getting a share?
I assume this is through mutual funds and ETF's? I would think it riskier to actually own the stock directly unless this headline is biased by the founders of the key NASDAQ stocks owning 80% of the 89% (by value) by dint of being founders...
It would be more interesting to see the breakdown of what's held in retirement and pension accounts vs. post-tax accounts.
It would be more interesting to see the breakdown of what's held in retirement and pension accounts vs. post-tax accounts.
I wonder what this looked like in the 20's right before it really hit the fan
This makes a lot more sense when you consider that the vast, vast majority of accumulated wealth over the last 100 years is corporate wealth.
To depoliticize ... I would interpret this statistic as an indication of the correlation between wealth and corporate stock ownership, which is almost tautological. If you own or help run a public company you are probably very rich.
And even in the hypothetical case where more of the "90%" are benefiting from stock ownership than ever, this statistic will always simply highlight the reality that running or owning a business makes you money.
To depoliticize ... I would interpret this statistic as an indication of the correlation between wealth and corporate stock ownership, which is almost tautological. If you own or help run a public company you are probably very rich.
And even in the hypothetical case where more of the "90%" are benefiting from stock ownership than ever, this statistic will always simply highlight the reality that running or owning a business makes you money.
How is it that the article says 100% of _all_ the U.S. stocks are owned by Americans? Aren’t foreigners able to own U.S. stocks? Investopedia says they can.
https://www.investopedia.com/ask/answers/05/foreignownership...
https://www.investopedia.com/ask/answers/05/foreignownership...
There is another perspective: these 10% are more vulnerable to a stocks pricing crisis. They are taking most of the risk to themselves.
Maybe 10% of americans are close to retirement age, and have been saving all their life in something called a 401k, which happens to be stock.
That would be ... not very outragous.
Sure, you can say 89% of stocks is too much and there must be other factors at work. But I refuse to be outraged until we control for the non-outragous factors, and see what remains.
That would be ... not very outragous.
Sure, you can say 89% of stocks is too much and there must be other factors at work. But I refuse to be outraged until we control for the non-outragous factors, and see what remains.
I don’t know what to make of this statistic. Wealth begets wealth so this is not surprising. Stocks are not a limited scarce resource so it’s not like the top are hoarding them. A more interesting stat would be to see if the bottom 90% increased their stock holdings or not. It would be a shame if that reduced for some population bracket.
And yet curiously all political discussions focus on the inequality between the lower middle class and the upper middle class.
The overwhelming majority of adult Americans will spend at least a year in the top quintile.
https://www.aei.org/carpe-diem/evidence-shows-significant-in...
https://www.aei.org/carpe-diem/evidence-shows-significant-in...
If the wealthiest 10% of Americans owned 89% of all U.S. mega yachts, what would that imply about the rest of the Americans?
So 40% of US stocks are owned by foreigners. 30% by pensions funds? And now 89% owned by the top 10% of Americans making 159% ???
I would guess the correct headline is something like "of the shares held directly by private American individuals the brokerage accounts of the top 10% hold 89% of those shares". Which sounds perfectly plausible.
Does the article writer understand this or are they confused as to the meaning? Is this artical and discussion just gibberish all the way down or is it me whose not understanding?
I would guess the correct headline is something like "of the shares held directly by private American individuals the brokerage accounts of the top 10% hold 89% of those shares". Which sounds perfectly plausible.
Does the article writer understand this or are they confused as to the meaning? Is this artical and discussion just gibberish all the way down or is it me whose not understanding?
Keep in mind, that this statistic doesn't necessarily mean that the top 10% own a lot of wealth. if the bottom 89% owns a total of 10$ worth of wealth then the top 10% isn't doing any better. take all that wealth and calculate what it would be if it was divided by 300 million people and then divide that number by the number of years it takes to acquire that wealth and you'll find, it's not very much wealth at all.
The part that concerns me the most is the fact that inequality is the result of a global money-printing ponzi scheme. As most people learn what has happened, the level of bitterness and division is going to be intolerable. What we're seeing now is nothing because most people still don't know what has happened. Even 90% of people on HN don't realize what has happened.
Also, now the system will be forced into hyper-drive. Those who have benefited from the scheme so far will benefit even more; the crony system will need to incentivize its proponents into an increasingly deep trance as the fraudulent nature of the scheme becomes increasingly difficult to ignore. Those who have been harmed by the system will be harmed even more. There will be a tiny percentage of the population living a blissful life of ignorance while resentment grows within the majority of the population. The narratives around everything; politics, the economy and society are going to fall apart. We might actually end up with some kind of anarchy.
Also, now the system will be forced into hyper-drive. Those who have benefited from the scheme so far will benefit even more; the crony system will need to incentivize its proponents into an increasingly deep trance as the fraudulent nature of the scheme becomes increasingly difficult to ignore. Those who have been harmed by the system will be harmed even more. There will be a tiny percentage of the population living a blissful life of ignorance while resentment grows within the majority of the population. The narratives around everything; politics, the economy and society are going to fall apart. We might actually end up with some kind of anarchy.
Isn’t this logically equivalent to “The most successful 10% of athletes have won 90% of olympic gold medals”?
We’re using their wealth (which naturally includes a lot of stock because it can be held in tax-deferred retirement accounts and has the greatest growth expectation historically) to identify the top decile, then we find that they, err, own a lot of stock. How surprising.
We’re using their wealth (which naturally includes a lot of stock because it can be held in tax-deferred retirement accounts and has the greatest growth expectation historically) to identify the top decile, then we find that they, err, own a lot of stock. How surprising.
How many percent of all Americans own any U.S. stocks? What is the wealth spread of the Americans who do own stocks?
The Swiss National Bank also holds a very large amount of US stocks [1]
"The Swiss National Bank owned U.S. equities worth a record $162 billion as of end June, reaping the benefits of a rallying market.
Data published on Friday showed the SNB held shares in 2,642 companies, including a $6 billion stake in Amazon Inc. and one worth $1.1 billion in Exxon Mobil Corp."
[1] https://www.swissinfo.ch/eng/swiss-central-bank-owns-record-...
"The Swiss National Bank owned U.S. equities worth a record $162 billion as of end June, reaping the benefits of a rallying market.
Data published on Friday showed the SNB held shares in 2,642 companies, including a $6 billion stake in Amazon Inc. and one worth $1.1 billion in Exxon Mobil Corp."
[1] https://www.swissinfo.ch/eng/swiss-central-bank-owns-record-...
If the wealthiest 10% of Americans own 89% of all U.S. stocks, that means "everyone else" owns the other 11%. That may include other Americans, but what about foreign investors (sovereigns, institutions, etc.)? Surely they own a bunch of U.S. equity? Perhaps the article uses the denominator not of "all U.S. equity" but "all U.S. equity owned by American individuals and institutions".
Hmm this doesn't entirely make sense. What kind(s) of ownership are they talking about? Direct stock ownership? Mutual Funds? Index Funds?
Something to think about: the Fed has been POURING money into the stock market, to keep "the economy" stable. They don't have to use money in that way; they could also use money to actually help people (theoretically anyway)
Something to think about: the Fed has been POURING money into the stock market, to keep "the economy" stable. They don't have to use money in that way; they could also use money to actually help people (theoretically anyway)
And that's an inflated number because of 401k accounts, which were largely a PR exercise to convince the population that market swings affect Americans in general rather than just the wealthy (although mainly a pretense to cut national labor costs by eliminating pensions.)
Good for them. I'm not envious.
How does this metric compare to other countries? Certain European countries I am familiar with don't have a strong emphasis on stocks as a wealth builder (as wrong as I personally think that is), and instead overindex on real estate.
Who says inflation hurts the rich more than the poor? I've been seeing that narrative lately. But the rich have access to hedges, and the poor have politicians who raise the minimum wage only when they have to.
It compares a recent Stanford grad from a wealthy family to a 55-year-old who was scraping through the first 35-40 years of life, but now makes $190k/yr as a successful tradesman during boom time. The former will count as "poor" and the latter will count as "top 10%".
In other words, no, it's not comparing Americans of different classes. It's comparing Americans at different stages of life. Or just the ebb and flow of income over and individual's life (selling a house even in a modest area can easily put you into the top 10% for a year).
You need to follow individuals over their lives to get a better picture of who is struggling and who is thriving.