Saving and Investment

The Emerging Capitalist Majority

Many modest wage-earning families now hold a substantial portion of their retirement savings in stocks -- a phenomenon that has been growing by leaps and bounds recently (see figure). LINK http://www.ncpa.org/pd/gif/stocks.gif

  • From 1990 to 1997, the frequency of stock ownership among adult Americans doubled to about 43 percent, according to Peter D. Hart Research Associates.

  • The Federal Reserve reported in 1995 that roughly 55 percent of America's shareholders had family incomes below $50,000 a year, and among households with incomes between $25,000 and $50,000, 48 percent owned stock -- a 44 percent increase since 1989.

  • Among households holding stock, the median value of those investments -- in 1995 dollars -- rose from $6,140 in 1983 to $13,500 in 1995.

  • Average households earning $25,000 to $50,000 own stocks worth $39,000 -- while those in the $50,000 to $75,000 earnings range hold stock assets worth about $82,000.

Historically, the age group least likely to hold shares has been 35 or younger. But from 1983 to 1995, the incidence of stock ownership in households headed by someone age 35 or younger tripled -- from 13 percent to 39 percent.

In the Hart survey, 89 percent of stockholders said they were investing for retirement. When asked how they would respond if stocks declined, only 8 percent said they would sell -- with almost all the rest responding that they would either make no change or add to their holdings.

Source: Richard Nadler, "Wall Street Is Main Street," National Review, March 9, 1998.

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