More Americans Than Ever Own Stocks

You can dismiss the stock market as a private club for the rich all you want, but in 2022, 58% of Americans held stocks, according to a recent poll from the Federal Reserve. It’s the highest mark ever in the history of the triennial survey.

Attack the Stock

We all know the story: Stuck at home with nothing to do and perhaps a little extra cash, millions of Americans flocked into the stock market in 2020 for the first time ever. Easy-to-use brokerage apps and a relative market crash sparked by the onset of the pandemic created an on-ramp for regular Joe Schmoe’s to masquerade as DIY Gordon Gekkos.

The once-every-three-years survey, conducted in 2019 and 2022, paints the perfect before-and-after picture of what we’ll call the Robinhood bump:

• In 2019, 53% of US households held stocks either directly or indirectly via retirement accounts and other such funds, though direct ownership still sat at just 15%. Those numbers increased to 58% and 21%, respectively, by 2022.
• The influx of stock ownership radically reshaped what the average portfolio looked like. In 2022, the median value of households’ direct stockholdings sat at about $15,000, or roughly just half of what it was in 2019.

Crash Course: New entrants learned everything you need to know about equities in the past three years. They go up. They go down. Sometimes violently so. Despite an early-pandemic panic, the S&P 500 still rose 16% in 2020, and surged another 27% in 2021. By 2022, investors witnessed a profits-over-growth course correct, with the index falling 19%, before bouncing back 23% so far in 2023. 

Shifting Tastes: Owning stock is something of an American pastime. US households keep about 39% of financial assets in equities, higher than most other countries, according to data from the Organization for Economic Cooperation and Development. But Americans are now turning toward bonds and money-market funds, typically left untapped by individual investors. We bow to anyone who managed to score a 2.8% rate on a 30-year mortgage in 2020 before pouring cash into a money-market fund with 5% returns in 2022.