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> Given that most stocks by far are held by wealthy people I also won't pretend to be an expert here, but I think this is where your thinking may be going astr
by kaycebasques 6y ago
> Given that most stocks by far are held by wealthy people
I also won't pretend to be an expert here, but I think this is where your thinking may be going astray. There are lots of retirement-age people who are counting on their pension funds to fund their retirement. Pension fund managers assume steady growth in stocks, something like 7-10% per year. If stocks don't meet that threshold, major parts of the pension system run into big trouble. Pension plans have trillions of USD in assets. This article [1] estimates ~$9T. Retirement-age people in general are a powerful constituent.
[1] https://www.investopedia.com/articles/credit-loans-mortgages/090116/what-do-pension-funds-typically-invest.asp https://www.investopedia.com/articles/credit-loans-mortgages...
- notJim 6y agoI always keep this paper from NBER handy https://www.nber.org/papers/w24085 https://www.nber.org/papers/w24085, especially this chart: https://imgur.com/h8Fo8yx https://imgur.com/h8Fo8yx. Stocks are in fact held primarily by the wealthy. This is a separate question though than whether they are also very important for retirement accounts. You are 100% right about that, even though middle-class retirement accounts represent a small share of the overall market.
- charwalker 6y agoAlthough many regular people have stocks held until retirement, they don't make up a majority of stock owners: https://finance.yahoo.com/news/the-richest-1-own-50-of-stocks-held-by-american-households-150758595.html https://finance.yahoo.com/news/the-richest-1-own-50-of-stock... And according to Wikipedia data, in 2016 84% of stock was owned by the top 10%. That leaves 16% of the market to everyone else, a very small %. https://money.com/stock-ownership-10-percent-richest/ https://money.com/stock-ownership-10-percent-richest/