84% of stocks owned by richest 10% of Americans


Originally published at: https://boingboing.net/2018/12/02/stock-bubbles-r-us.html







As an aside, I think the most telling thing is that most of the financially successful people I know put their money in index funds (ETFs). Now, there’s a discussion to be had about the ratios of stocks to bonds, interntional vs US, but the general consensus seems to be that while it may be possible to beat the market, doing so is a full time job and it’s hard to separate the wheat from the chaff in terms of mutual fund managers, so picking ETFs with much lower management costs balances out the gains.

Once you know this, you realize that a huge chunk of “finance” is basically a mix of gambling and chicanery.


If you have a lot of money…index funds make the most sense…generally speaking they are low risk and close to guaranteed gains/zero losses as it gets.

But for the rest of us…index funds suck. They essentially ensure the status quo.


I agree that it’s bad some people have low incomes. But isn’t part of the issue a lack of a social safety net? If I was in a country like Canada or Germany, I’d likely have given being a writer a go for example. Socialized medicine and public pensions reduce the need to horde $$$.

These aren’t empty words - I try to maintain pseudo anonymity so I won’t be specific, but I voted to increase my taxes recently. To quote the former governor of California: I fucking love paying taxes


“…just 77%…” just?!


I’ve got half a million dollars in stocks & bonds I inherited from my mom. The majority of her wealth she got from her Dad, who used to work for an East Texas oil company called Humble Oil (In 1962, they decided to change their name to Exxon.) I’ve moved most of the stock out of Exxon Mobil & diversified. My dirty oil company money has been switched to Green technologies, which means I have Siemens & GE stock. But, hey, I’ll be dead in 20 years. I just hope humans survive.


I am at a loss at what this “I agree that it’s bad some people have low incomes.” has to do with this “But for the rest of us…index funds suck. They essentially ensure the status quo.”

My point is that…for those with serious wealth (that is not millionaires…which when you include property, retirement accounts, insurance policies…most people are actually millionaires…even if it isn’t liquid assets…I mean the richest 10% who have serious liquid cash assets available to them) they have the ability to put that cash in index funds that may only be making them 3-4% or in a bull market maybe 6-8%…but its like having a high interest savings account with no cap on how much they can put into it.

The rest of us who really need the money we have and are able to put into the market through investment vehicles (like employer provided DC plans or personal retirement/investing vehicles like IRAs or brokerage, or even via an HSA) regardless of how much or little…we need that money to work for us. So as a result assuming you are not forced into company stock, you should be steering well clear of indexed funds and going into aggressive growth funds. Yes, you can have big losses…but it is really the only way to also have big gains outside of sheer dumb luck.


The article is from last year, so I wonder if it’s still 84% or if it ticked up a point or two.


I think it’s the opposite. They are cost efficient and great for smaller investors. Offers diversification without all the trading fees and manager expenses. And they outperform funds.

$10K invested in an index fund in 1980 would equal $760K today.

Did you see the bet that Buffet made about them beating managed funds?


actually given how bad the market has done in the last few months…it’s probably ticked down. When markets turn bear…wealthy people pull assets out and switch to liquid accounts. The rest of us stay in hoping for a rebound…“you haven’t lost anything so long as you don’t sell”…is the common saying.

those ultra rich selling off can trigger bigger market losses for the rest of us as investors get even more scared.

It far too many ways…they control it not just in total assets and market share…they also control which way the market can swing.


Are those guillotines out for the 33 million richest Americans?


An index fund can be an aggressive growth fund. (Say, an index of S&P)

Typically people pick a ratio of stocks to bonds and domestic to international to match their preferred risk profile.

(For example, I’m 90% in stocks, 10% in bonds, and both are split into international and domestic. So I accomplish the same as a mutual fund with 4 index funds for a fraction of the cost. Just need to rebalance once a year)

I’m a little under the weather so I might be talking past you or misunderstanding so apoligies in advance.

Luckily I’m sick on a sunday at least…


I misread this as “84% of Americans owned by 10% of stocks” and honestly what’s the fucking difference


Funny was just listening to this on our National broadcaster https://www.cbc.ca/radio/thesundayedition/michael-s-essay-a-new-survey-shows-how-poorly-writers-are-paid-in-this-country-1.4927252


I’ve been at the top retirement/personal investing corporation in the world for 18 years now. Need I say any more?

Index funds are designed to match the market. They can beat it but that is not their intent.

Edit: also feel better.


What’s richest 10% mean? by net worth? or by income?


I repeat my incredibly unpopular opinion: the stock market is a legal gambling system and the destruction of company pensions to be replaced by 401K’s is just a way of getting more Americans suckered into it to pad the value of the wealthy’s estates. The minute the stock market crashes, the middle class goes broke and the rich keep right on doing what they do. Endless growth cycles are anathema to a healthy financial system, and our system should be based on “company is paying its bills and its customers and workers are satisfied” instead of “company is growing by leaps and bounds and swallowing up smaller businesses.”