Investing inequality. Is the stock market a problem or a solution?
The fact that the top 10% of American families own 89% of all U.S. equities
Equities
Equities can be defined as stocks or shares in a company that investors can buy or sell. For example, when you buy a stock, you are purchasing equity, thereby becoming a partial owner of shares in a specific company or fund.Equities do not pay a fixed interest rate, and as such are not considered guaranteed income. Consequently, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling p
Equities can be defined as stocks or shares in a company that investors can buy or sell. For example, when you buy a stock, you are purchasing equity, thereby becoming a partial owner of shares in a specific company or fund.Equities do not pay a fixed interest rate, and as such are not considered guaranteed income. Consequently, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling p
Read this Term demonstrates the stock market's substantial involvement in widening wealth disparities in the country. Here are five intriguing statistics concerning wealth disparity in the US stock market according to the latest Federal Reserve
Federal Reserve
The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the
The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the
Read this Term data:
- During the Covid-19 epidemic, the wealthiest 1% acquired about $6.5 trillion in corporate shares and mutual funds, while the poorest 90% gained only $1.2 trillion.
- In the second quarter, the top 10% of earners held a record number of shares in publicly traded companies and mutual funds, while the bottom 90% held just around 11% of individually held stocks, down from 12% before the epidemic.
- There have been millions of new investors entering the market as a result of the epidemic, but the benefits of this influx have not been evenly distributed. Robinhood, which has added over 10 million users in the past two years, has an average account size of about $4,500. Lots of retail investors chased the latest hyped stock like AMC, Gamestop or cannabis stocks, and lost over half their account.
- The wealthiest 10% saw their equities soar 43% between January 2020 and June 2021, while the poorest 90% observed a 33% gain in stock value.
- The wealthiest 1% of earners now control more than 32% of all wealth in the country; over the past year and a half, their wealth has grown mostly due to investments in equities.
Some claim that such figures underline the stock market's involvement in rising wealth gap in the United States and the need for more fair wealth distribution regulations. As more individuals enter the stock market, it is crucial to guarantee that everyone has equal opportunity to benefit from its growth, rather than just a select few. What do you think? Share your thoughts and please comment below!
