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Stocks were hit hard. This has cut into the wealth for a large number of Americans.
Gallup data shows that more than 60% of Americans now have money in the stock market. This is up from just above 50% at the middle of last decade. That reflects comparatively large holdings among those with annual incomes at or above $100,000—but Gallup also found that about two-thirds of middle-income Americans, and a quarter of those with annual incomes below $40,000, were invested through some combination of stocks or funds.
That tracked with data released in late 2023 by the Federal Reserve, which found that more than a third of families in the bottom half of the U.S. income distribution held stock—along with more than three-quarters of the upper-to-middle income group and 95% of the top decile.
The dramatic and downbeat response of the market to Trump’s latest tariff announcement has left many investors, both on Wall Street and Main Street, wondering how to react as their portfolios have shrunk.
Stocks have been whipsawed on Monday morning after a steep two-day decline. Some are waiting for the market’s direction to change, while others expect the drubbings will continue. (Follow Investopedia’s live coverage of the markets today here.)
YouGov released data on Friday that showed about a fifth of Americans investing in stocks have a “high risk tolerance”. About 40% said they keep their investments regardless of economic or market uncertainties.
“Your brain is screaming for you to run. It’s working exactly as it should. Callie Cox is the chief investment strategist of Ritholtz wealth management. She wrote in an email that if you don’t, I recommend getting your head checked. “Honoring your natural tendencies is important, but you shouldn’t listen to it.” In many cases, touching a hot pot isn’t a good solution.
