The Blubber

58% of U.S. households are now investing in the stock market, an all-time high, per WSJ.


The most recent Survey of Consumer Finances by the Federal Reserve reveals that a record-breaking 58% of American households are now invested in stocks. This represents a notable increase from 52.6% in 2019 and surpasses the previous high of 53.2% recorded in 2007, just before the onset of the Great Financial Crisis.

The survey, conducted every three years, highlights a significant driver behind this surge, attributed to direct ownership of stocks rather than through mutual funds and other accounts. Direct stock ownership experienced an unprecedented increase, rising from 15% in 2019 to 21% in 2022. The last time direct stock ownership reached this level was in 2001, at 21.3%.

The average investment by households saw a 14% uptick from 2019, reaching $489,490 in 2022-adjusted dollars. Overall, the net worth of all surveyed families witnessed a substantial 37% increase.

Amid the pandemic, the combination of federal stimulus checks and the emergence of trading apps like Robinhood played a role in encouraging individual investors to enter the market. This period coincided with the meme-stock phenomenon of 2021, where retail traders drove shares of companies like Gamestop, AMC, and Bed, Bath & Beyond to soaring heights.

The survey suggests that new participants in direct stock ownership generally held smaller portfolios compared to families with a long history of stockholding. The median stock holdings saw a roughly 50% decrease between 2019 and 2022, dropping from $29,000 to $15,000.