Despite All-Time High 15,000 Dow, Fewer U.S. Adults Invested in Stocks

I’m in stocks. If you are too, odds are your neighbor isn’t.

An annual survey produced by Gallup revealed that just 52% of U.S. adults own stocks. This is the lowest percentage ever reported by Gallup, who began tracking this in 1998.

To put this in perspective, U.S. adults have never participated in the stock market at greater than 65% (2007), according to the Gallup poll. The next highest participation rate was 62% in 2008, 2005, 2001, and 2000.

What’s strange though is that as the stock market has recovered and as the unemployment rate has lowered, the percentage of stock ownership has continually gone down from 57% in 2009 to 52% in 2013.

This news might come as a shock to many, especially after the Dow hit above 15,000, and an all-time high, this week. With stocks doing so well, long since recovered from the crash of 2007, you might wonder why so few are still choosing to remain on the sidelines.

Continued long-term unemployment is the obvious culprit. Last week, it was reported that unemployment was at 7.5%, still one and a half points higher than anytime pre-2009 according to the same study. And the labor force participation rate is still very low. The lowest since 1979.

But the other factor is obviously the damage done to consumer confidence in the stock market. Even though some might have the cash to invest, they are simply remaining in other assets, like bonds, real estate, and gold.

The poll also shows that the biggest change in participation over the last five years came from those with an income between $30K-$75K, and those aged 30-49.

I never left the market. But I had the income (for the most part) to support my continued participation. I’m also in my mid thirties and I’m only confident in the long-term market. Did you continue to participate? Did you sell your stocks, either because of unemployment or for distrust? Do you trust the market?



Last Edited: May 9, 2013 @ 3:51 pm
About Philip Taylor

Philip Taylor, aka "PT", is a husband and father of two. He created PT Money back in 2007 to share his thoughts on money and to meet others passionate about managing their finances. All the content on this blog is original, and created or edited by PT. Read more about Philip Taylor, and be sure to connect with him on Twitter, Facebook, or view the Philip Taylor+ Google profile.

Comments

  1. I started buying in 3 days after the market bottom and have been buying ever since.  Things are a little risky now because we are due for a pullback, but I think this bull market still has plenty of upside in the long term.

  2. kevin_is_money says:

    Thanks for linking to my site. And while I don’t trust the stock market, I am actually still invested in it through my 401k.
    With that being said, I think it’s important to note that these record highs are not true records. If we are looking at inflation adjusted numbers, the market hit its peak around 2001. Thank about that. In purchasing power, the overall stock market is down significantly since 2001. That’s 12 years without any return. It’s not somewhere I want my money to be.

  3. Being only 24 currently, I’ve just recently started investing in the stock market.  I have plenty of time before I’ll want to take out the money, so I’m in it for the long term.  Hopefully the next 10 years are better than the last 10!

  4. We’re still quite heavily invested in stocks (perhaps more so than the general consensus for our ages) at about 85%.  We re-balance every year, and starting with this year’s re-balancing, we’ll be slowly pulling out of stocks in general (probably about 5% every 2 years or so), as we get older and want less risk in our portfolio.  But that’s not a decision being made based on the stock market itself, just the general “we’re getting older and have a shorter time frame” re-balancing.  I’d keep even more in stocks, but hubby isn’t as aggressive as I am and so we’ve compromised :)