The wealthiest U.S. households are strengthening their grip over corporate America.
The richest 1 per cent of Americans now account for more than half the value of equities owned by U.S. households, according to Goldman Sachs.
Since 1990, the wealthiest have bought a net US$1.2-trillion in company stakes, while the rest of the population has sold more than US$1 trillion.
Three decades ago, ownership was also lopsided, but the top percentage point of Americans by wealth only controlled 46 per cent of all U.S. equities held by households. By the end of September 2019, that proportion had hit a record 56 per cent, amounting to US$21.4 trillion, according to the investment bank’s calculations. That includes both public stock and ownership stakes in private companies.
“The wealthiest households have been by far the biggest driver of positive household equity demand,” Goldman Sachs analysts, led by Arjun Menon, said in the report.
“Accelerating U.S. economic growth and rising stock prices should continue to support equity purchases by the top 1 per cent.”
As of September 2019, the bottom 90 per cent owned US$4.6 trillion of equities, or 12 per cent of the total, the analysts noted.
The widening wealth disparity has been driven by stagnant wages for many Americans, which held them back from partaking in the stock market’s gains of the past decade.
Despite the dotcom collapse and the global financial crisis, the broad U.S. stock market has climbed more than tenfold since 1990 — gains that have mostly accrued to the richest part of the population.
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