The Federal Reserve is giving merit to the saying “the rich get richer” with their latest data. According to CNBC, the central banking system of the United States recently released a report on stock market ownership. The numbers scream financial inequality given that the wealthiest 10% of Americans now reportedly own 89% of all U.S. stocks.
Prior to the Covid-19 pandemic, the bottom 90% of Americans only held 12% of the U.S. stock market. This means the new data shows a decline in ownership. That ninety percent of Americans only added $1.2 trillion to their wealth throughout the pandemic.
Meanwhile, America’s wealthiest citizens within the the one percent mark, cashed in on more than $6.5 trillion in corporate equities and mutual fund wealth. Over 70% of the wealth gained by this group during the last year and a half came from stocks.
CNBC reports that the stock market was “the main source of wealth creation in America during the pandemic.” Apparently, it’s doubled since the dip in March 2020 and jumped 40% since January 2020. Yet, given the staggering difference in ownership values, CNBC says the stock market is also “the main driver of inequality.”
The wave of stock and investment curiosity that recently hit social media didn’t do much to curve these numbers. While some people have joined trading groups and attended stock classes, others have used established platforms to learn the trade.
Robinhood is one stock trading mobile app frequently used. The app reportedly boasts 22 million users with 10 million new accounts popping up over the last two years. Apparently, younger, first-time investors are behind many of the new profiles.
Not only are the new investors buying in at a higher rate, they’re also trading more often. The roadmap among the new users seems to be buying and quickly selling the stocks to win big payouts. However, not everyone wins big this way.
Per the Federal Reserve, stocks owned by the top 10% saw a 43% gain in value. In comparison, the bottom 90% saw their stock wealth rise at 33%.
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