Why People Choose Not to Invest in the Stock Market
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Here's your Money Briefing for Thursday, November 3rd. I'm J.R. Whelan for The Wall Street Journal. There are all kinds of investors out there. The day traders who jump in and out of the stock market, people who only buy mutual funds for their 401k, even people who buy and hold their shares for years. But a sizable portion of the population doesn't have any money invested in stocks.
When you look at people who have a household income under $40,000 a year, 75% of those people say they don't have any money in the stock market at all. But at $100,000 a year or above, still 11% of Americans in that group say they don't have any stocks.
On today's show, we'll talk with Wall Street Journal personal finance reporter Joe Pinsker about this trend. Plus, we'll hear from a Florida resident who doesn't have any money in the market, not even a retirement account, and never has. That's after the break.
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For many Americans, yesterday's decision by the Federal Reserve to raise interest rates had them keeping close tabs on their portfolio or 401k. But many others had no such concerns because they don't have any money in the stock market. In a moment, we'll hear from a Florida resident who's in that category. But first, WSJ personal finance reporter Joe Pinsker is with us. Joe, thank you very much for being here.
Yeah, thank you for having me.
So, you know, Joe, a recent Gallup survey showed that 41 percent of Americans say they have no money invested in the markets.
Why do 41% of Americans report having no money invested in the stock market?
What reasons do they give for that?
Many of these people just can't afford to invest. This is something you see when you start breaking down this data by income. When you look at people who have a household income under $40,000 a year. 75% of those people say they don't have any money in the stock market at all. But for another group of people, there appears to be some element of choice. Even once you start getting into household incomes at $100,000 a year or above, still 11% of Americans in that group say they don't have any stocks.
65-year-old Florida resident Arlene Lahera is one of them. So Arlene, do you have any money invested in the market, like even a retirement account?
I do not, JR. Not at this time, no. Why not? Well, I'm a little leery of investments. I'm a little apprehensive about risk-taking. I'm not much of a gambler. I don't go to the track. I don't go to Vegas. And I'm just a little leery of the stock market.
How does household income influence who invests in stocks?
It just seems so volatile. And I own a home, and I choose that as my investment means. I do not have extra cash to put in the market. I'm, like many people, paycheck to paycheck and just trying to pay down my credit card debt and make my bills, pay my mortgage. The utilities and things like that are going up lately, monthly. And so just trying to meet those payments is all I can do at the moment.
Okay. So outside of the stock market, is there any kind of investing you do to try to protect and grow your holdings?
Well, I own my home and I have had success in real estate.
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