Asset Growth with Stock Market Rise... Individuals Own Half of Stocks
At the end of the fourth quarter last year, the wealth of the top 1% richest Americans was found to amount to 6 quadrillion won.
On the 28th (local time), CNBC reported, citing data from the U.S. Federal Reserve (Fed), that as of the end of the fourth quarter last year, the wealth of the top 1% richest Americans was $44.6 trillion (approximately 6,210 trillion won).
On the 14th, an employee is organizing dollars at the Hana Bank Counterfeit Response Center in Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@
The top 1% richest individuals are those with assets exceeding $11 million (approximately 14.9 billion won). Their total net worth increased by $2 trillion (approximately 2,700 trillion won) in the fourth quarter last year. Most of the asset increase came from stocks. The value of corporate stocks and mutual fund shares they held surged from $17.65 trillion (approximately 22,828 trillion won) in the third quarter to $19.7 trillion (approximately 26,595 trillion won) in the fourth quarter. Meanwhile, real estate values rose slightly, and the value of privately held companies declined, offsetting changes in other assets outside of stocks.
As of the end of the fourth quarter last year, they accounted for 30% of the total national wealth of the United States. The wealth of the top 10% asset holders accounts for 67% of the total wealth.
CNBC analyzed that the increase in assets of the top 1% richest Americans is due to the rapid asset growth trend following the COVID-19 pandemic in 2020. Since 2020, the wealth of the top 1% richest Americans has increased by about 49% ($15 trillion). At the same time, the assets of the American middle class also grew by 50%.
Economists explained that the rise in the stock market increases consumer investment through the so-called "wealth effect." When their stock holdings surge, they become more confident and invest more aggressively. Mark Zandi, Chief Economist at Moody's Analytics, said, "The wealth effect from soaring stock prices is a powerful tailwind for consumer confidence, spending, and broad economic growth."
According to the Fed report, the top 1% richest Americans own half of the individual-held stocks. Economists stated that the rise in stock prices brings enormous gains to the wealthy and activates the luxury consumption market. The assets of middle-class and low-income Americans are more influenced by wages and housing values than stocks.
Charles Schwab's Chief Investment Strategist, Liz Ann Sonders, noted that the proportion of stocks in the assets of the top 1% is steadily increasing. As of the end of last year, stocks accounted for 37.8% of their total household assets.
CNBC analyzed that considering the S&P 500 index increased by about 10% this year, the wealth of the top 1% likely already surpassed last year's record by now.
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