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Why do higher stock prices make the middle class feel more wealthy? Is it really that common to own enough stocks to make up a significant portion of your wealt

Why do higher stock prices make the middle class feel more wealthy? Is it really that common to own enough stocks to make up a significant portion of your wealth? As far as I can tell its essentially just a useless hobby unless you have significant savings. The only people I know that are into stocks are also into things like horse racing etc, and they make/lose about as much from it.

woofcat 7y ago
>Why do higher stock prices make the middle class feel more wealthy? Is it really that common to own enough stocks to make up a significant portion of your wealth? At least in my country the stock market is basically you're retirement fund unless you're one of the few people with a Government pension. Most companies here offer a matching program to invest for your retirement. This is dumped into the stock market for general growth, with the idea that it's there when you retire.
- RugnirViking 7y ago
  Maybe so, but I can't imagine the day-to-day contractions or growth spurts in the economy have much of an effect on your retirement planning, or your general consuming habits.
  - woofcat 7y ago
    day-to-day no, however it means people are more keen to pay attention to market news. After all, choosing bad investments that earn you say 4% y/o/y return, vs 15% y/o/y results in _massive_ changes on the scale of 20-40 years.
mech1234 7y ago
>A once-every-three-years study by the Federal Reserve Board found that in 2016, 51.9 percent of families owned stocks, either directly or as part of a fund. https://www.politifact.com/california/statements/2018/sep/18/ro-khanna/what-percentage-americans-own-stocks/ https://www.politifact.com/california/statements/2018/sep/18... I would add that there is so much total stock wealth, even though the top 10% own 84% of said wealth, the remaining amount is very very large.
- RugnirViking 7y ago
  Presumably most of that is in pensions? I just can't imagine many people following the financial market with any interest.
  - mech1234 7y ago
    Are you including 401k index funds/ general retirement funds in your definition of pensions? That is a typical source of stock ownership for many Americans. You don't have to actively follow the stock market to be an owner of stocks. Buying and holding index funds or mutual funds in general is a great way to build wealth with little effort. Many households in the middle class are stock owners through this method. Most large employers offer retirement plans that include this.
  - pwinnski 7y ago
    Pensions are very uncommon in modern America. 401(k) investments, on the other hand, are available and pushed heavily onto nearly everybody with a white-collar job. And 401(k) investments are stocks. So a huge percentage of people hold stocks, or at least funds which contain stocks.
    - perl4ever 7y ago
      With a government job, you may have a pension and a 457b plan, which is much like a 401k. It's often mentioned that one of the biggest investors in the US (and I assume the world) is CalPERS, which manages pensions for California state employees. You may not be particularly in tune with the stock market just because you have a state pension, but indirectly it matters to you.

woofcat 7y ago

>Why do higher stock prices make the middle class feel more wealthy? Is it really that common to own enough stocks to make up a significant portion of your wealth? At least in my country the stock market is basically you're retirement fund unless you're one of the few people with a Government pension. Most companies here offer a matching program to invest for your retirement. This is dumped into the stock market for general growth, with the idea that it's there when you retire.

RugnirViking 7y ago
Maybe so, but I can't imagine the day-to-day contractions or growth spurts in the economy have much of an effect on your retirement planning, or your general consuming habits.
- woofcat 7y ago
  day-to-day no, however it means people are more keen to pay attention to market news. After all, choosing bad investments that earn you say 4% y/o/y return, vs 15% y/o/y results in _massive_ changes on the scale of 20-40 years.

mech1234 7y ago

>A once-every-three-years study by the Federal Reserve Board found that in 2016, 51.9 percent of families owned stocks, either directly or as part of a fund. https://www.politifact.com/california/statements/2018/sep/18/ro-khanna/what-percentage-americans-own-stocks/ https://www.politifact.com/california/statements/2018/sep/18... I would add that there is so much total stock wealth, even though the top 10% own 84% of said wealth, the remaining amount is very very large.

RugnirViking 7y ago
Presumably most of that is in pensions? I just can't imagine many people following the financial market with any interest.
- mech1234 7y ago
  Are you including 401k index funds/ general retirement funds in your definition of pensions? That is a typical source of stock ownership for many Americans. You don't have to actively follow the stock market to be an owner of stocks. Buying and holding index funds or mutual funds in general is a great way to build wealth with little effort. Many households in the middle class are stock owners through this method. Most large employers offer retirement plans that include this.
- pwinnski 7y ago
  Pensions are very uncommon in modern America. 401(k) investments, on the other hand, are available and pushed heavily onto nearly everybody with a white-collar job. And 401(k) investments are stocks. So a huge percentage of people hold stocks, or at least funds which contain stocks.
  - perl4ever 7y ago
    With a government job, you may have a pension and a 457b plan, which is much like a 401k. It's often mentioned that one of the biggest investors in the US (and I assume the world) is CalPERS, which manages pensions for California state employees. You may not be particularly in tune with the stock market just because you have a state pension, but indirectly it matters to you.