Stocks are up but 80% of the value is held by the richest 10%(washingtonpost.com)
washingtonpost.com
Stocks are up but 80% of the value is held by the richest 10%
https://www.washingtonpost.com/posteverything/wp/2017/03/02/perspective-on-the-stock-market-rally-80-of-stock-value-held-by-top-10/
325 comments
Unfortunately the ultimate rebalancer of wealth historically has been revolution and war. It's why the descendants of Roman plutocrats don't own the world now.
We've lived through a relatively peaceful and, more importantly, politically stable period in the developed world since WW2. And inequality continues to grow.
The problem now is twofold:
1. Capital is essentially beyond borders; and
2. The diminishing loyalty to the nation state.
(1) is the real problem with modern "trade" treaties like the TPP (that and they're used to enforce policies on smaller countries like the US stance on IP). They're not really about trade anymore. It's about freeing the movement of capital, which is a huge problem.
To put (2) in context, you have to remember that income taxes in the US 100 years ago were essentially done on the honour system. There were no computers. There was no accountability. Now we live in an age where the wealthiest people, who owe their wealth to the political stability in the countries they've made their wealth, are essentially unwilling to contribute to funding those same states.
What's more, the wealthiest individuals and corporations play off states against each other, demanding ever-more concessions to attract business. And when those concessions go away they move onto the next sucker.
It all just feels like something will have to give in the next century or so. We do have crumbling infrastructure in the developed world. Someone or something has to pay for it.
Look at places like Puerto Rico, which spent like crazy (way beyond its means). The wealthy have abandoned it and what's left to do? Bail it out by the Federal government?
Unfortunately it just seems like capital is too mobile.
We've lived through a relatively peaceful and, more importantly, politically stable period in the developed world since WW2. And inequality continues to grow.
The problem now is twofold:
1. Capital is essentially beyond borders; and
2. The diminishing loyalty to the nation state.
(1) is the real problem with modern "trade" treaties like the TPP (that and they're used to enforce policies on smaller countries like the US stance on IP). They're not really about trade anymore. It's about freeing the movement of capital, which is a huge problem.
To put (2) in context, you have to remember that income taxes in the US 100 years ago were essentially done on the honour system. There were no computers. There was no accountability. Now we live in an age where the wealthiest people, who owe their wealth to the political stability in the countries they've made their wealth, are essentially unwilling to contribute to funding those same states.
What's more, the wealthiest individuals and corporations play off states against each other, demanding ever-more concessions to attract business. And when those concessions go away they move onto the next sucker.
It all just feels like something will have to give in the next century or so. We do have crumbling infrastructure in the developed world. Someone or something has to pay for it.
Look at places like Puerto Rico, which spent like crazy (way beyond its means). The wealthy have abandoned it and what's left to do? Bail it out by the Federal government?
Unfortunately it just seems like capital is too mobile.
Maybe we should ask everyone claiming about the rigged system what they really want: income evenly distributed to all workers ? More taxation for those who earn more than the average ? Central economic planning so everyone get's the same information regarding where the profits are ?
Frankly, sometimes some people need to take a refreshing trip into North Korea instead of perpetually complaining about the downsides of capitalism.
And according to the article, it's been this way since the late 1980's...
So, basically, all that's changed recently is that stocks have been going up.
And when they eventually go down, 80% of the losses will be held by the richest 10% also.
So, basically, all that's changed recently is that stocks have been going up.
And when they eventually go down, 80% of the losses will be held by the richest 10% also.
It's not just about who has money to invest. Investors who have better investment strategies make a LOT more money in the long term:
http://www.businessinsider.com/forgetful-investors-performed...
and because of that the people with better strategies will accumulate a much larger share of the market.
Most investors have poor returns because they defer to their self-defeating cognitive biases, they don't take the time to understand investing, and they often naively believe they have a simple "system" which will outsmart the market.
http://www.businessinsider.com/forgetful-investors-performed...
and because of that the people with better strategies will accumulate a much larger share of the market.
Most investors have poor returns because they defer to their self-defeating cognitive biases, they don't take the time to understand investing, and they often naively believe they have a simple "system" which will outsmart the market.
Majority is owned by retirement accounts: http://www.businessinsider.com/who-actually-owns-the-stock-m...
Diving into the article one sees that these ratios are largely unchanged since the 1980s.
Do they own 80% of the value because they're the richest 10% or are they the richest 10% because they own 80% of the value?
The problem with richest having a lot of stock is that if the market goes down they will look for a way for other to pay for the broken dishes. In Spain we see that the person responsible for the security of our financial system CNMV is under investigation for not taking the measures for protecting people from false information, see for example http://wolfstreet.com/2017/02/18/spain-central-bankers-finan...
Same claim can be made about land appreciation in major metropolitan areas (e.g. NYC, SF Bay Area, Los Angeles, Seattle, etc). We need to figure out how to balance out gains in this recovery.
> The median net worth (income + assets including homeownership – debt) of white households was about $117,000 in 2013. For African American households, the comparable figure is just under $2,000.
This is astonishing to me. That's median, not mean!
This is astonishing to me. That's median, not mean!
A question i have been largely fruitlessly asking in several such threads before: How do i invest in U.S. stock market being a non-American (Russian living in EU)? Without paying too much in taxes, that is.
And in 2017 the world rediscovers Pareto Principle, and the people are scared, like they have always been anyway.
I think I will get downvotes for this but I have an honest question.
Why does it matter if the rich become richer?
I am by no mean a rich guy, I just don't see how it can impact my life or be bad for other people if a few of us have a lot of money (doesn't matter how they get it. I'm not talking about money from illegal activities).
They still have to use it, thus contribute back to the economy.
Buffett's secretary Bosanek pays a tax rate of 35.8 percent of income, while Buffett pays a rate at 17.4 percent on profit.
http://news.yahoo.com/warren-buffett-secretary-talk-taxes-22...
Breaking News: People who have money know how to make money.
Arent people 401k's and pensions part of the market ?
Last I checked Stock Market it open to all for trading and investing. This is another article that has twisted the facts to basically hating on Donald Trump's success so far.
The rich will always be among us.
I love to see more stocks interest here. It's the only thing that hasn't been discussed much.
In many parts of the worls it's the top 0.1%, in contrast we seem to be doing quite well.
I don't understand this ideology. In a country like the US, who cares what the riches n percent own, pay, use, etc.? Really.
Mark Zuckerberg was just a kid in a dorm. Look where he is now.
OK, don't like that example? Here:
https://goo.gl/uEUtKE
Don't complain about what others have achieved. In the US you have the opportunity to reach for the stars (literally). If you want it bad enough, with a little luck and hard work you can get there.
There will always be far more wealthy people than poor or middle class. Why? Because, outside of inheriting wealth, making money is very hard. Some get lucky and it seems to happen easily. That's not the norm. Becoming wealthy is hard perilous work. It requires incredible focus, dedication and discipline. In some cases it can cost people their family and health.
I don't like a culture that vilifies the wealthy or creates divisions along these lines. In a country like the US most people aren't rich due to a lack of opportunity, oppression or some grand plan to keep people down. No, most people are not rich because they either don't have what it takes or are not willing to invest the time, effort and sacrifice required to get there.
If 80% of the value is held by the richest 10% it is because they made money and continue to risk it in investments such as the stock market. I have friends who lost hundreds of thousands of dollars on investments in just a few months. Nobody talks about them taking those kinds of risks. They do talk about the new Ferrari they bought with the proceeds of the 1 out of 100 investments that actually panned out.
Funny how you never see articles during market crashes to highlight how much wealth that same 10% lost.
Or how they pay the bulk of all taxes collected.
This ideology is not aligned with a sensible reality.
Mark Zuckerberg was just a kid in a dorm. Look where he is now.
OK, don't like that example? Here:
https://goo.gl/uEUtKE
Don't complain about what others have achieved. In the US you have the opportunity to reach for the stars (literally). If you want it bad enough, with a little luck and hard work you can get there.
There will always be far more wealthy people than poor or middle class. Why? Because, outside of inheriting wealth, making money is very hard. Some get lucky and it seems to happen easily. That's not the norm. Becoming wealthy is hard perilous work. It requires incredible focus, dedication and discipline. In some cases it can cost people their family and health.
I don't like a culture that vilifies the wealthy or creates divisions along these lines. In a country like the US most people aren't rich due to a lack of opportunity, oppression or some grand plan to keep people down. No, most people are not rich because they either don't have what it takes or are not willing to invest the time, effort and sacrifice required to get there.
If 80% of the value is held by the richest 10% it is because they made money and continue to risk it in investments such as the stock market. I have friends who lost hundreds of thousands of dollars on investments in just a few months. Nobody talks about them taking those kinds of risks. They do talk about the new Ferrari they bought with the proceeds of the 1 out of 100 investments that actually panned out.
Funny how you never see articles during market crashes to highlight how much wealth that same 10% lost.
Or how they pay the bulk of all taxes collected.
This ideology is not aligned with a sensible reality.
"The richest 10 percent of adults accounted for 85 per cent of assets. The bottom 50 percent of the world’s adults owned barely 1 per cent of global wealth."
http://www.foxnews.com/story/2006/12/06/study-richest-10-per...
Only 80%? Seems like they're giving up some of their lead. They... Who am I kidding, we are.
http://www.investopedia.com/articles/personal-finance/050615...
Actually, to be completely correct _you_ are. I don't own stocks. I don't gamble :)
http://www.foxnews.com/story/2006/12/06/study-richest-10-per...
Only 80%? Seems like they're giving up some of their lead. They... Who am I kidding, we are.
http://www.investopedia.com/articles/personal-finance/050615...
Actually, to be completely correct _you_ are. I don't own stocks. I don't gamble :)
The market is not only for millionaires and billionaires. You can trade $6.95 on ETRADE now and can even trade for free with Robinhood. I actually hold about 80% of my holdings in ETRADE and 20% in Robinhood. I use Robinhood for buying smaller chunks of shares (lowering dollar cost average) or more risky smaller trades.
Savings accounts are stupid! They offer fractions of percent interest. Look at exchange-traded funds that track an index such as the S&P 500 or Nasdaq Composite. My personal favorite ETFs are the tried-and-true SPY and QQQ.
I wrote a blog post on Robinhood and leveraging capital using margin on my blog for those interested:
https://justink.svbtle.com/leveraging-capital-using-robinhoo...