Surging Stock Market Still Fails to Yield Wealth Growth for Average Americans

One of the most interesting conundrums is the surging wealth gap in America. Despite two of the largest bull markets in history since 1980, most Americans struggle with making ends meet and are unprepared for retirement. Such a reality starkly differs from the belief that rising asset prices benefit the masses.

Unsurprisingly, in February, Fidelity published its latest analysis showing the number of retirement accounts with balances of more than $1 million surged toward a record. To wit:The number of seven-figure 401 accounts at Fidelity Investments jumped 20% in 2023’s final quarter to 422,000, marking a sharp recovery from the previous quarter’s 7.7% drop.

Again, considering that most Americans alive today participated in either one or both of the most significant secular bull markets in history, the lack of wealth is quite appalling. If individuals had invested $1000 in 1980 into the“One in 4 Americans have no retirement savings and those who are saving aren’t saving enough.

We have previously written about the various psychological pitfalls investors make in destroying their investment capital. However, for many, it is a problem of being unable or unwilling to save money.If you ask anyone who doesn’t save money, you will likely get one of those three answers. It is hard to, personal savings rates, and debt-to-income ratios suggest that the average American family is flush with cash with little debt.

The share of annual incomes between the bottom 80% and the top 5% is evidence of that wealth transfer from the middle class.is paved with good intentions. After decades of piling on increasing debt levels to generate economic growth, the damage to economic growth is becoming more visible. Economic growth trends are already falling short of previous long-term growth trends.

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