An analysis from Pew Research Center reveals that more than half of U.S. households have some form of investment in the stock market.

Pew Research examined the publicly-available data set from the Survey of Consumer Finances, a study by the U.S. Federal Reserve most recently conducted in 2016.

Highlights

 

A majority — 52 percent — of the American households have some form of investment in the stock market.

According to Pew Research, only a small fraction (14%) of American families are directly investing in individual stocks. They found that most of the investments in the market comes in the form of retirement accounts.

One prime source of variation can be found across the income levels of these households. As expected, those with incomes above $100,000 have the highest share of families invested in the market at 88 percent.

As we can see in the By Family Income section of the graph above, increasing income levels seems to be directly related to the percentage of families invested in the market. The higher their income, the more likely that a U.S. household would invest.

Grouping across race and ethnicity, we can see that there are noticeable differences in the share of households investing per group.

Families headed by non-Hispanic, white adults are the most likely to invest in the stock market, with 61 percent of the survey respondents having some form of investment. This figure is about double the percentage of stock market investors among households headed by non-Hispanic black (31%) and Hispanic (28%) adults.

Across the age groups of the heads of the household, the differences are not as sharp. Apart from the below 35 age group at 41%, more than half the households across all age groups own some stock as of 2016.

Volatile times

The COVID-19 pandemic has managed to negate all the gains of the Trump administration since he was seated in 2016.

Pew Research said that the rate of descent in the S&P 500 Index recorded during this outbreak is even worse than that of the 2007 global financial crisis, clearly showing how much damage has been done so far.

Pew Research said about 41% of the U.S. workers have access to employer- or union-sponsored retirement plans, both of which are usually connected to the stock market.

This, along with the fact that a majority of U.S. households invested in the stock market will definitely result in a significant number of citizens being affected by this decline.

Last April, the Senate and The White House agreed to a nearly $2-trillion economic stimulus package in order to alleviate the economic fallout due to the pandemic.

While this may help bring back some optimism in the quickly declining market, the U.S. and the world in general still has a lot to endure in the midst of the outbreak that is currently plaguing us. Given this, we must take our situation in full seriousness and exert all efforts that we can muster to put an ultimate end to this outbreak.