What if Mr. Market threw a party and few people decided to attend? Well, that’s what’s been happening in the last half-decade.
While in other eras, the five-year anniversary of a bull market would have been cause for celebration, bold headlines and TV special reports, this month’s marking of the 176 percent surge in stock prices since March 2009 was met with silence or, at best, a yawn.
That’s because this bull market has had the narrowest participation since the advent of the 401(k) plan back in 1978. That’s bad news for the White House, the Federal Reserve and the rest of us, who have been patiently waiting for the Bank of Ben Bernanke’s money-printing regime to help kick the economy into high gear.
If a recent poll is any indication, that is wishful thinking. While the 5-year-old bull has created about $1 trillion in wealth for the nation’s 500 or so billionaires, a recent poll by Bloomberg shows that three-quarters of all Americans report that Dow 16,000 has had little or no impact on their financial well-being.
Only 1 in 5, or 21 percent, said the market’s upward move made him or her feel “more secure.” So much for the so-called wealth effect.
The raw numbers also tell the story. The share of household assets concentrated in equities rose from 18.5 percent a year ago to 21.8 percent late last year, surpassing the 2007 high of 19 percent, according to economist David Rosenber.
In other words, more stocks are in fewer hands. And while it can still be said that about half of all Americans own stock, either directly or through their 401(k)s and other retirement accounts, many of those plans sport modest balances.
Indeed, half of Fidelity Investments’ customers have less than $26,000 squirreled away in their 401(k) accounts, according to Bloomberg.
That’s a far cry from the so-called “Ownership Society” — a nation of homeowners and stockholders — that President George W. Bush envisioned 10 years ago when running for his second term.
“If you own something,” Bush said back then, “you have a vital stake in the future of our country.”
That sentiment still holds, and the poll found that optimism about housing prices is a bright spot.
Unfortunately, one of the longest, strongest bull markets of the past century, one that could have repaired the balance sheets of millions of American households, didn’t have as many participants as it could have.