The wealthiest Americans now own almost all of the stock market – 89% to be exact

2021-10-19 09:56:50

Wall Street girl stocks investing
US politicians often place major bets on Wall Street.

  • The top 10% of Americans now hold 89% of corporate equities and mutual fund shares, a record high.
  • The top 1% alone hold over half of stocks owned by households, according to the Federal Reserve.
  • That means the wealthiest Americans disproportionately profited from the stock market’s strong performance over the last year.

America’s highest-earners broke a few records during the pandemic.

The latest: The top 10% of Americans now own a record-high 89% of household stocks, as CNBC’s Robert Frank first reported.

According to Federal Reserve data the top 1% alone hold around 54% of corporate equities and mutual fund shares. It’s the latest datapoint showing how the wealthiest Americans’ fortunes have grown throughout the pandemic, even as the lowest earning Americans fall behind.

The stock market has seen a robust recovery following an initial large dip in March 2020. The Federal Reserve shows that those profiting the most from the strong market are already the wealthiest Americans.

Looking outside of Wall Street, the top 1% of Americans now hold more overall wealth than all of the American middle class. American billionaires added $2.1 trillion to their cumulative net worths during the pandemic, according to a report from the left-leaning Institute for Policy Studies (IPS) and Americans for Tax Fairness. The US also minted over 100 new billionaires during the pandemic, going from 614 billionaires in March 2020 to 745 in October 2021.

Meanwhile, the bottom 90% of Americans saw their share of gains shrink, holding just about 11% of stocks; the bottom 50% holds just 0.6% of corporate equities and mutual fund shares. According to the Census Bureau, the poverty rate ticked up by 1% from 2019 to 2020 – the first increase after five declining rates in a row. Median household income also shrunk by 2.9%.

These numbers come against the backdrop of America’s uneven recovery from the pandemic, but the trend of wealth inequality in America has been ongoing for decades. Research from Jason Furman, a former top economist to President Barack Obama, found that the amount of time it takes a typical American family to grow their income has slowed significantly. From 1948 to 1973, the typical family would be able to double their income roughly every 23 years – or once a generation. Since 1973, however, it would take them 100 years to do so.

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