1. Only a little over half of Americans own stocks ~55%1
This has held fairly steady since 2010. Prior to the 07-09 Great Recession, 62% of Americans reported that they owned stocks. As a whole, stock ownership appears to be highly correlated with race and education. 85% of individuals with postgraduate degrees reporting owning stocks while only 33% of individuals with no college degree said they owned stocks. Additionally, just 28% of Hispanics and 42% of African Americans reported owning stocks.
2. Institutions own ~80% of public equity market cap2
Institutional investors include hedge funds, pension funds, insurance companies, savings institutions, endowments, foundations, and other open-ended investment companies. Notably, institutional investors own 80.3% of the S&P 500, which is considered a great representation of the US stock market.
3.The US stock market is ~50% of the world stock market3
There are about 60 major stock indexes around the world. The top 5 stock markets by market capitalization are the New York Stock Exchange, NASDAQ, Tokyo Stock Exchange, Shanghai Stock Exchange, and the Hong Kong Stock Exchange.
4. The Derivatives Market could be bigger than the stock market4
Simply put, a derivative is a contract between two or more parties that derives its value from an underlying entity. For example, I could buy an option to purchase Google stock in 2 months from now for a certain price. Options, futures, forwards, and swaps are some of the most common derivatives. Some estimates have the as high as $640 Trillion which is incredible.
That’s all for now. Thanks for reading.
As always, please send me your questions, comments, and concerns: abhin@abhin-sharma.com
I’d love to hear your thoughts on these, if I missed anything, or what you liked/didn’t like.
References
- What Percentage of Americans Owns Stock?
- 80% of equity market cap held by institutions
- Distribution of countries with largest stock markets worldwide as of January 2020
- How Big Is the Derivatives Market?
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Abhin Sharma 