More Than 51 Million Americans Own Stock, Survey Shows Graphic
NEW YORK (AP) _ More than 51 million Americans owned shares in a company or stock mutual fund last year, 70 percent more than a decade earlier, but growth slowed toward the end of the turbulent 1980s, the New York Stock Exchange said Tuesday.
The nation’s biggest stock exchange said that about one in five individuals were involved in the stock market as of mid-1990, five times more than in 1952.
But the bulk of the rise in share ownership in the late 1980s came from investments in mutual funds, suggesting that market volatility and the 1987 crash dampened enthusiasm for individual stocks.
The NYSE sought to portray a sustained rise in stock ownership in the 1980s, but it did not conduct a survey between 1985 and 1990, when many investors reduced their individual stock holdings in response to the crash.
Nonetheless, NYSE Chairman William H. Donaldson said the study indicated that despite concerns about market volatility, ″investors continue to find stocks an important part of their long-term financial planning.″
The survey was the 12th conducted periodically by the NYSE since 1952. The exchange said it based the findings on interviews with 5,096 households nationwide in late July and early August 1990.
The NYSE used the data to conclude that a total of 51.4 million Americans were invested either in individual stocks or mutual funds, 21.1 percent of the total population.
That was up only slightly from 47 million, or 20.1 percent, in the last survey in 1985. A much larger jump occurred in the previous five years, from 30.2 million shareowners, or 13.5 percent of the population, in 1980.
In 1952, when the NYSE conducted its first such survey, just 6.49 million Americans were shareholders, or 4.2 percent of the population. Share ownership declined during the recession and market slump of 1970-75.
NYSE spokeswoman Sharon Gamsin said the NYSE did not intentionally bypass the post-crash period in deciding when to conduct the survey, but was involved in other matters, including studying the market dive. Investor confidence in the market is believed to have rebounded only in the last year.
The most dramatic change in shareholder behavior from 1985 to 1990 was a 130 percent increase in the number of Americans invested in stock mutual funds, to 25.3 million from 11 million.
The number of individuals owning shares of NYSE-listed stocks increased just 17 percent in the period, the smallest rise of any type of holding, to 29.6 million.
Ownership jumped 107 percent to 6.67 million people for stocks listed on other exchanges and 32 percent to 11.05 million for over-the-counter issues.
The NYSE concluded that the level of market participation indicates that the crash and recent declines in the market ″have had minimal lasting effect on the public’s involvement in ownership of equity instruments.″
Outside experts disputed that contention, saying Americans remain hesitant to invest in individual stocks, placing their money in safer mutual funds that typically include large numbers of specially selected issues.
The crash ″discouraged a lot of people from going directly into the market,″ said John Markese, research director for the Chicago-based American Association of Individual Investors, which regularly surveys its 110,000 members.
″I don’t think people who were in the market left, but you don’t see as many people buying directly,″ he said. ″What you’re seeing in the statistics is an increase in mutual funds rather than people going out and buying individual stocks,″
The survey shows that in 1985, nearly 2 1/2 times as many people owned NYSE stocks as owned mutual funds. In 1990, the number of mutual fund owners was almost equal to the number holding NYSE stocks.
The NYSE’s historical comparisons are based on different standards. From 1952-75, the NYSE compiled its data by examining samples of shareholder lists held by companies and member firms. Since 1980, the levels have been determined through household interviews.
Not much has changed since 1985 in the gender and age of typical shareholders. The NYSE said 63 percent of all shareholders were men and 37 percent women, compared to 61 percent and 39 percent in 1985. The median shareowners’ age declined to 43 years old from 44 in 1985 and 52 in 1975.
Median portfolio size grew 84 percent to $11,400from $6,200 in 1985. But shareholders appeared to be doing little buying and selling. From mid-1989 to mid-1990, 45 percent of shareowners made no transactions and just 15 percent made six or more transactions.
The typical male shareholder was 45 years old with a median household income of $46,400 and median portfolio size of $13,500. He was a professional or manager who graduated from college and owned an average 3.4 stocks, which were bought through a broker.
The typical woman shareholder was 44 with an income of $39,400 and a $7,200 portfolio. She owned three stocks, had some college education, was a professional or clerical worker and bought her shares through a broker.