Even though 14 million fewer Americans were employed in July 2020 compared to July 2019, stocks around the world are continuing to rise. The MSCI World index of stocks in developed nations increased by 6.6% August - the biggest jump for that month since 1986. However, such stock market fluctuations tend to go unnoticed by many Americans of which just a surprisingly modest majority, only 55%, actually own stocks, a new Gallup poll reveals. 

84% of stocks owned by richest 10%

Even though nearly half of all American households own stock shares (whether directly or indirectly through trusts, pension funds, or mutual funds), the richest 10% own as much as 84% of all stocks, a recent paper by NYU economist Edward N. Wolff reveals. This is a considerable change from 2001 which saw the top 10% owning just 77% of all stocks. Additionally, 94% of the richest American households own significant stock holdings totaling $10,000 or more in shares, while only 27% of the middle class do. According to Wolff, this concentration of stock holdings is down to the stock market busts that happened back in 2001 and again in 2008. While these dips put the middle class off investing, wealthier investors had the opportunity to increase their holdings, Wolff explains. 

Stock ownership varies by income

Only 14% of American families are directly invested in individual stocks, while 52% have some type of market investment largely through owning retirement accounts like 401(k)s or IRA, the latest Federal Reserve data reveals. This data also shows only one-third of families in the lower income brackets have stock holdings.
Additionally, roughly 70% of families in the middle income groups own stocks, while those in the richest 10% had stock ownership rates reaching higher than 90%. On the whole, older white adults on the higher end of the income scale are most likely to invest in stock, Pew Research Center reveals. Specifically, 88% of individuals who earn at least $100,000 a year own stocks compared to just 19% of those who earn under $35,000. For that 19% who do own stock, a measly $8,400 is the average holding. 

Beginner investing: starting small

While investing in the stock market can seem daunting, especially to beginners with no experience, there's never been a better time to join the stock market. When it comes to investment options, less expensive stocks are an appealing option for those looking to invest without spending lots of money. Although stocks priced at $10 or less can pose some risk, they can certainly be a valuable and worthwhile investment. Interested investors will find numerous exciting opportunities for growth - whether it be in biotech, artificial intelligence, or gold stocks. Cheaper stocks give investors the freedom to trade in and out with minimal hassle depending on the stock price while simultaneously helping drive up share price.

Without significant stock ownership, many Americans aren't planning for financially-secure futures. Beginning with inexpensive stocks is a great way for Americans to start investing and grow their wealth.