/3 charts: Why the stock market sell-off wont impact Americans right away – Business Insider

3 charts: Why the stock market sell-off wont impact Americans right away – Business Insider


Brendan McDermid/Reuters

  • Stocks plunged last week over escalating fears of the coronavirus’ spread and the damage it could inflict on global economies.
  • The market sell-off erased $6 trillion of market value, according to S&P Dow Jones Indices.
  • Three charts illustrate why the stock market bears little short-term impact on most people’s lives.
  • Most Americans don’t own stock, and those that do skew wealthier. And under half of families have retirement accounts.
  • Visit Business Insider’s homepage for more stories.

Stocks plunged last week and entered a correction amid escalating fears of the coronavirus’ spread and the damage it could inflict on the global economy. When all was said and done, the S&P 500 had suffered its worst week since the financial crisis – October 2008 to be exact.

The drubbing erased more than $6 trillion in market value in just five days, according to S&P Dow Jones Indices senior analyst Howard Silverblatt.

The sell-off was fueled by concerns that efforts to contain the virus could stymie economic growth and cut corporate profits. The coronavirus has spread to over 55 countries beyond its point of origin in China, infecting over 83,000 people around the world.

On Thursday, the S&P 500 posted its fastest correction – defined as a 10% drop from its recent peak – since the Great Depression.

Read more: Goldman Sachs reveals the 10 best stocks to buy now for a market comeback from the coronavirus-driven plunge

The Dow Jones industrial average and Nasdaq Composite index are also down at least 10% from their latest highs. The Dow alone lost over 3,000 points last week. The losses could wreak havoc on the economy if it spirals into recession, though that outcome is still very uncertain.

But it won’t immediately impact their day-to-day existences.

“For most Americans, it’s a side show in their economic lives,” Jacob Hacker, director of the Institute for Social and Policy Studies at Yale University, told USA Today about the stock market. “What really matters to them is the security of their jobs and health care, and the amount they have to pay for big-ticket items like housing and education.”

Here are three charts illustrating why the stock market bears little short-term impact on most people.



Most Americans simply don’t invest in stocks.

Business Insider/Andy Kiersz, data from Federal Reserve

The chart above shows the share of Americans in each part of the wealth distribution who directly own stocks.

Data from the Federal Reserve shows that only 8% in the bottom half of household net worth own stock shares. That’s compared to 89% in the upper half of the distribution.

Just over half – 51% – are in the wealthiest 10% of US households.

That trend locks out a substantial share of Americans from reaping the benefits of a booming market – or the effects of one that plummets.



The amount and value of stock holdings skews heavily towards the richest Americans.

Business Insider/Andy Kiersz, data from Federal Reserve

The average family among the top 10% of US households who own stock tend to have portfolios worth $200,000 and above, according to the Federal Reserve – at least 60x more than the bottom half of the wealth distribution.

As a result, stock losses would hit those with much higher incomes initially.



Less than half of Americans in the bottom half of the wealth distribution had money invested into retirement accounts.

Business Insider/Andy Kiersz, data from Federal Reserve

Under half of Americans in the bottom half of the wealth distribution had money invested into retirement accounts, which includes IRAs, 401(k)s or similar.

In 2017, the US Census Bureau reported only a third of workers contributed to a 401(k) plan.

Of course, the recent stock market losses puts a dent in their savings.

Nearly half of families in America don’t have any retirement savings at all, according to a study from the left-leaning Economic Policy Institute.


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