Hit on the Middle Class: Financial Assets & Stocks

This continues our series on economic changes affecting the middle class

Changes in U.S. Family Finances from 2007 to 2010: Evidence from the Survey of Consumer Finances published by the Federal Reserve Board declared “From 2007 to 2010, median assets for families having any assets fell 19.3%, from $232,100 to $187,200, and the mean fell 12.8%, from $702,100 to $612,300.” (p23).

Financial Assets

“Although the overall ratio of financial assets to total assets rose over the recent period, that
increase is attributable to the relatively larger declines in the value of nonfinancial assets;

• Median holding of financial assets for families having such assets fell 28.8 percent, while the mean fell 3.3 percent.
• Recent change in the median erased the gains experienced in the previous three-year period (2004 to 2007) and left median financial assets at their lowest level since the 1995 survey.
• The decline in median financial asset holdings was widespread across demographic groups, with gains observed for
• Families headed by someone 75 or older,
• Top 10 percent of families ranked by income
• Top 10 percent of families ranked by net worth.”

Publicly Traded Stocks

“The direct ownership of publicly traded stocks is more widespread than the direct ownership
of bonds, but, as with bonds, it is also concentrated among high-income and high-wealth
families.

• Families with any such stock holdings declined 2.8% from 2007 to 2010, to 15.1%
• Declines in ownership were more common than increases, with the noticeable exception of families in the top decile of net worth, for whom ownership rose 2.5%
• Ownership also rose slightly for families in the top decile of income (by 0.3%) and for families headed by a person who was self-employed (by 0.2%)
• Although the major stock price indexes decreased about 25%, the median amount of directly held stock for families with such assets rose 12.4% (the mean fell only 9.5%)
• For 35.5% of stockowners in 2010, at least one of the companies in which they
  owned stock was one that employed, or had employed, the family head, spouse or partner

Monday we discuss retirement accounts listed in the Federal Reserve’s Report