NEW YORK (MainStreet) — The Dow Jones Average broke 16,000 on Monday, a new high for the blue-chip index. The S&P 500 joined the fanfare, having a record breaking day at 1,800 points for the first time in the history. The Nasdaq Composite, a marketplace generally associate with technology companies, climbed to its highest level in 13 years. By anyone's measure, the stock market is having a fantastic year.
Unfortunately, only about half of Americans have gotten to share it.
According to recent numbers from Pew Research, nearly half of Americans don't own stocks, bonds or any other form of market investment.
"Gallup's annual economy and finance survey, conducted in April, found 52% of Americans saying they owned stock, either directly or through a mutual fund, retirement account or other investment vehicle," according to a report from Pew. "The ownership share dropped sharply after the 2007-08 financial crisis and has continued falling throughout the nation's wobbly recovery."
Pew found that ownership of stocks tends to be defined by age, race and socioeconomic status, with most investors generally older, white and wealthy. In fact, 55% of white people surveyed said that they have money in the stock market, compared to 28% of black people and 17% of Hispanics.
Age also plays an enormous factor. Survey participants aged 30 to 64 were more than twice as likely to have money invested than anyone between 18 and 29, the "Millennial" generation. In fact, only 24% of respondents under 30 had money invested in the stock market, leaving them out of the year's recent windfall altogether.
The greatest correlation was wealth. According to Pew, four in five households that earn over $75,000 have money invested in the stock market. As incomes shrink, so does investment, until at $30,000 per year or less, where only 15% of people have money in any kind of stocks, bonds or retirement account. Given this connection between income and investment, Pew's findings are unsurprising that participation in the stock market has decreased in the wake of the Great Recession.
Finally, politics also seemed to play a role. Registered voters were more than twice as likely to have money invested in the stock market: 53% compared to 25% for those unregistered to vote.
Many observers have heralded the stock market's return as a sign of real economic recovery. What these numbers reveal, however, is just how flawed that analysis might be. Although the stock markets have rebounded to record highs, only about half of the country has shared in those gains, and even among them investments are most concentrated among the already-wealthy.
For 48% of America, for the young, the poor, minorities and anyone without a college degree, a market recovery on its own does relatively little.
--Written for MainStreet by Eric Reed, a freelance journalist who writes frequently on the subjects of career and travel. You can read more of his work at his website www.wanderinglawyer.com.