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The Federal Reserve gives dignity to the saying “the rich get richer” with its latest data. According to CNBC, the US central banking system recently published a report on stock market ownership. The figures show financial inequality, given that the richest 10% of Americans now own 89% of all American stocks.
Before the Covid-19 pandemic, the bottom 90% of Americans held only 12% of the US stock market. This means that the new data show a decline in ownership. That ninety percent of Americans alone added $ 1.2 trillion to their wealth throughout the pandemic.
Meanwhile, America’s richest citizens within the brand of one percent earned more than $ 6.5 trillion in corporate shares and wealth from mutual funds. Over 70% of the wealth gained by this group in the last year and a half comes from shares.
CNBC reports that the stock market is “America’s main source of wealth creation during the pandemic.” Apparently, it has doubled since the downturn in March 2020 and jumped 40% since January 2020. Yet, given the staggering difference in property values, CNBC says the stock market is also “the main driver of inequality.”
The wave of curiosity about stocks and investments that has recently hit social media has not done much to distort those figures. While some people have joined trading groups and attended stock classes, others have used established platforms to learn the craft.
Robinhood is a commonly used mobile stock trading app. The app is reported to have 22 million users with 10 million new accounts appearing in the last two years. Apparently younger, first-time investors are behind many of the new profiles.
New investors not only buy higher, but also trade more often. The roadmap among new consumers seems to buy and sell stocks quickly to make big profits. However, not everyone wins this way.
According to the Federal Reserve, the shares owned by the first 10% marked a 43% increase in value. By comparison, the bottom 90% saw their stock wealth increase by 33%.
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