Where’s The Love?

Gallup recently published the results from a poll that gauged the interest level from Americans in owning stocks. Three results from the survey are worth observing.  

First, just over half of the American population, or 52%, say they currently have money in the stock market. This number matches the lowest ownership rate in the 19-year history that Gallup has conducted this survey (chart below).

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Despite the massive rise in the S&P 500 since the depths of the financial crisis, there appears to be a large percentage of Americans who missed out on the gains.  

Second, back in 2007, nearly two-thirds of Americans were invested in stocks, which shows the real impact of 2008 on the mindsets of Americans. Confidence in the stock market was crushed and has yet to return in any material way.  

Third, those younger than 35 are the ones who saw the largest drop since 2007 (see below).

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This trend is concerning since this is the cohort that should have the highest allocation to stocks. They have a long time horizon and can withstand the volatile nature of equities. Furthermore, stock returns compound over time, which can transform single-digit annual returns into phenomenal long-term returns. 

In any event, the survey is interesting but frankly not overly surprising. The Great Recession left scars that will likely take much longer than a few years to heal. 

Click Here to read the full article from Gallup.

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