Topic

Americans Investing in the Stock Markets

Instructions

The overall percentage of U.S. citizens participating in a stock market either through individual holdings or through financial intermediaries such as mutual funds has declined since the 2008 recession. Prior to 2008, a greater percentage of Americans held stock market investments than do in 2018. This is an interesting characteristic, given the following factors:

Investing in the market through savings plans, 401k or 403b accounts, individual IRAs, or similar retirement plans has never been easier given the amount of information available to any individual. Individuals can invest small amounts such as $20 and benefit from dollar-cost averaging through automatic deposits and electronic transactions such as payroll deductions.
While a vast majority of Americans will be dependent on Social Security as their primary source for retirement income, the message that relying solely on SS for retirement continues to be broadcast by media outlets such as the AARP.
Since 2008, the markets have rebounded significantly from their 2008 lows.
Basic principles of investing are easily located on the internet, from a variety of sources. For example, see the “Index Card” resource posted in Week 5, which is a short list of fundamental investing principles.

For this discussion post, you are to state a position and present an argument related to the above state of investing by U.S. citizens today. Why has the overall percentage of Americans invested in the market decreased in the last decade? And, subsequently, what can be done about this? In your argument, which is to be supported by both textbook and outside research, delve into one or more of the primary concepts presented in this week’s readings. These include the various stock market indexes, international markets, the role of the mutual fund industry, active versus passive investing, in addition to multiple other concepts.

Answer preview

The 2008 recession saw many households in America lose assets to the tune of billions of dollars. Ten years since the recession, the percentage of American citizens who invest in the stock markets has declined significantly. Most of them now prefer bonds and other equity assets that offer low but fixed interest rates. Before the 2008 recessions, American citizens were enthusiastic about investing in the stock market (Randall & Joyner, 2018). However, ten years later the numbers of investors in the stock markets have declined significantly.

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