Re:The Covid-19 pandemic is forcing a rethink in macroeconomics
by charwalker on Friday July 24, 2020 @05:09PM
(#23944485)
Although many regular people have stocks held until retirement, they don't make up a majority of stock owners: https://finance.yahoo.com/news/the-richest-1-own-50-of-stock...
And according to Wikipedia data, in 2016 84% of stock was owned by the top 10%. That leaves 16% of the market to everyone else, a very small %.
Re:The Covid-19 pandemic is forcing a rethink in macroeconomics
by notJim on Friday July 24, 2020 @02:16PM
(#23942764)
I always keep this paper from NBER handy https://www.nber.org/papers/w24085, especially this chart: https://imgur.com/h8Fo8yx. Stocks are in fact held primarily by the wealthy.
This is a separate question though than whether they are also very important for retirement accounts. You are 100% right about that, even though middle-class retirement accounts represent a small share of the overall market.
I also won't pretend to be an expert here, but I think this is where your thinking may be going astray. There are lots of retirement-age people who are counting on their pension funds to fund their retirement. Pension fund managers assume steady growth in stocks, something like 7-10% per year. If stocks don't meet that threshold, major parts of the pension system run into big trouble. Pension plans have trillions of USD in assets. This article [1] estimates ~$9T. Retirement-age people in general are a powerful constituent.
[1] https://www.investopedia.com/articles/credit-loans-mortgages...