The Nasdaq on Thursday busted through its all-time closing high of 5,048.62, reached during the go-go dotcom days of March 2000, and the S&P 500 now stands just a small fraction of a percentage point away from its own record close. But almost half of Americans say they have missed out on the bull market that has lifted stocks to such lofty levels.
Gallup’s annual Economy and Finance survey, released Wednesday, found that 55 percent of Americans said they have money invested in the stock market, either through individual stocks, mutual funds or retirement accounts like IRAs and 401(k)s.
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That percentage has stayed roughly the same since 2009, though it dipped as low as 52 percent in 2013. And it suggests that some Americans remain gun shy about entering the market in the wake of the financial crisis of 2007 and 2008, which wiped out trillions in wealth — or financially insecure enough to plow some money back into stocks. Gallup’s surveys before 2009 had found stock ownership levels routinely above 60 percent, and as high as 65 percent.
“While the stock market has made significant progress in recent years, the upward trend hasn't lured more Americans back into the stock market following the outflow seen after the 2008 financial crisis,” Gallup’s Justin McCarthy wrote.
The relative distrust in the stock market is evident in another Gallup finding: More Americans name real estate as the best long-term investment than any other major asset class. More than three in 10 picked real estate, while 25 percent chose stocks. Households making more than $75,000 a year, by contrast, were more likely to choose stocks and mutual funds by a margin of 38 percent to 33 percent.
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The Gallup figures are in line with other research on Americans’ stock ownership. The Federal Reserve’s most recent Survey of Consumer Finances (PDF) found that 48.8 percent of families held stocks directly or indirectly as of 2013 — meaning either by buying shares of specific companies like Apple or by putting money into pension funds, 401(k) plans and other pooled or managed accounts. That was down from 53.2 percent in 2007, with the rate of stock ownership falling for families in the bottom half of the income distribution, holding steady for the next 40 percent and climbing for the top 10 percent.
A Pew Research Center survey from 2013 similarly found that 53 percent of American said they had no money in the stock market, even in retirement accounts.
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Gallup’s survey, conducted April 9 to 12, found a split in stock ownership along income levels, and other surveys have found that education levels make a difference, too. In short: the richer and better educated someone is, the more likely they are to invest in stocks. Gallup’s latest results found that 56 percent of adults in households earning between $30,000 and $74,999 said they own stocks, down from 72 percent in 2007. Among households making $75,000 or more a year, 88 percent said they have at least some money in stocks, down only slightly from 90 percent in 2007.
The Gallup poll did find one sign that the interest in stocks and appetite for risk could grow in coming years: Stock ownership has rebounded among adults between the ages of 18 and 34, climbing to 49 percent from 41 percent in 2010.
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