Unfortunately, only about half of Americans have gotten to share in the bull market.
TheStreet.com
The Stock Market Delivers for the White and Wealthy
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.
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Here is the problem as I see it. During the 2007 and 2008 downturn most middle class people got out of the stock market when it dropped to around 7000 points then and never returned. So, they sold their stocks at a severe loss, then their houses were forclosed, then they got laid off their jobs and where are they now?
The main problem with the stock market now is that unless you really make a study of it and know what you are doing you are going to lose your shirt.
So, the crazy thing about it is unless you can afford to live without your stock investments you likely shouldn't be in the stock market at all which I find incredibly paradoxical considering where the stock market is right now.
So, unless you understand managed risk and are a long term investor who can afford to put your money in and not touch it for up to 10 years or more (and even then unless you hedge your bets by being about 40% into tax free municipal bonds, property, businesses and other investments so you are diversified likely you cannot afford to be in the stock market still.
But, where is 2/3 of the recovery since 2008? 2/3 of the recovery has actually been in the stock market. Imagine you could afford to ride the market down to 7000 and then rode it back up to what it is today? And the only thing you might have removed is the dividends on all your stocks?
The other thing that is starting to rise in value again is real properties in some areas of the U.S. However, there it is always: Location, Location, Location just like it has always been. So, if you chose very carefully what you bought whenever your property is now regaining value. (But only if you chose very carefully where you bought). Otherwise it either stayed the same or actually lost value at this point.
So basically, unless you have a master's degree in economics or finance, or a member of your family does likely you shouldn't even be in the stock market at this point unless you have the steel nerves and experience to know what you are doing. This is incredibly unfortunate for most Americans because wages in real terms keep dropping and Americans have lost over 7% of the value of their real wages since about 2000.
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