Stock ownership is up
Given the general dissatisfaction of the investing public, you'd think that stock ownership would have fallen markedly in the U.S. since the tech bubble burst in 2001 and was followed by waves of corporate scandal.
Not so, according to two finance industry trade groups, the Securities Industry Association and the Investment Company Institute. According to their joint survey, "Equity Ownership in America, 2005," half of all U.S. households own stocks, either directly or in a mutual fund or retirement plan.
According to the release:
“Despite experiencing a market contraction that was one of the worst bear markets since the Great Depression, the number of individuals in the U.S. owning equities is up 5.2 percent since 2002, and up 14.4 percent since 1999," says Frank Fernandez, Senior Vice President of the Securities Industry Association.
That's 56.9 million households, up from 54.1 million in 2002 and 40 million in 1995.
The growth isn't happening because we're turning into a nation of stock jockeys, however. Study authors conclude that the increase in equity-owning households is due mainly to the spread of 401(k) plans.
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Surely the increasing percentage of the population buying into the market is continuing to pump up stock prices. One day, when there are no more new investors, we will see the big stock market collapse that never completely happened in 2000.
Posted by: Half Sigma at November 16, 2005 04:13 PM