Robert Frank has the numbers on where the money has gone since the Fed started making so much of it:
The Federal Reserve Survey of Consumer Finance found that only 48.8 percent of Americans held stock either directly or indirectly in 2012, the latest period measured. That’s the lowest level since 1995, when 40.5 percent of Americans held some form of stock. (Indirect ownership of stock includes stocks held in mutual funds, 401-K plans and other investment vehicles.)
The survey said only 14 percent of Americans own stocks directly—down from 21 percent in 2001.
Overall stock ownership (direct and indirect combined) is down only four points since the 2007 crash, to 49% from 53%. But I get two takeaways from those numbers. The first is that overall ownership is the 50% threshold, which is a level it didn’t cross until 2011. That’s after nearly two years of “recovery,” as you already know. I’d also argue that direct ownership is a better measure of a person’s faith in the overall economy, and in their ability to do something themselves about their own future. Naturally, you would expect that figure to be much lower than indirect ownership, because people generally are risk averse and few have the time, knowledge, or skills to manage their own portfolios.
So it might be telling that a year into the Dot Com Crash of 2000, a record percentage of Americans owned stocks directly. It takes no small amount of courage and faith in the future to hold when everyone around you is shrieking “SELL!” Yet more than one in five Americans were doing just that.
But getting back to September 9, 2014 — we have a Federal Reserve pumping more money at fewer people (who are reportedly heading for the lifeboats anyway), and scratching our heads wondering why so few people feel very good about this economy.