The stock market has been on a tear, hitting record high after record high. But not everyone is enjoying the gains.
Stock ownership is at the lowest level in 15 years after declining steadily over the past few years following the financial crisis. Today just 52% of Americans say they own stocks, whether individually or through funds, according to Gallup's annual Economy and Finance survey. Back in 2007, stock ownership peaked at 65%.
Why are so many people sitting on the sidelines? The quick answer is that they see stocks as too risky. From 2008 to 2012, investors pulled more than $500 billion out of US stock mutual funds - and funneled over $1 trillion into bond funds.
The other answer is that people don't think they can afford to invest. The withdrawal from stocks just might be "more a function of their ability to buy it, than of whether its value is soaring".
The sharpest decline in stock ownership is among middle-income Americans. In 2008, 66% of the middle-class owned stocks…today that stands at just 50%. And there also seems to be a correlation between high unemployment and a low rate of stock ownership.
The bottom line, according to Gallup: the market rally is the reason investors want to jump into the market, but continued high unemployment is the reason that they haven't.