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Primary disagreement here:
They like to tell us that 50 million households in the US own stock,... at least through a mutual fund, eh? Well maybe that's true,.. but there are a hell of a lot of people who pick up a few shares here and there through company stock purchase plans, but who never really make it to "investment class" status. The stock market is but minimally relevant to any but the uppermost of that investment class, and a rising market hardly portends good things for the broadest spectrum of the population.
First off, I think this incorrectly discounts the true (if often neglected) function of the stock market: providing business and industry with capital. That ability to raise capital is an important part of economic growth. While we tend to view the stock market more in "personal finance" terms and "Dow goes up, me make money!", this function is very important to the economy, and does have an effect on more than just the wealthy.
As for the "uppermost of the investment class" statement, that was true many years ago but, as you noted, participation in the market is very widespread mostly through institutional investing, pensions, etc. While I think there can be a case made for the market being "minimally relevant" over the short term, it is extremely important over the long term becasue lots of us are foregoing current consumption now for consumption plus a return at a later date (i.e. retirement, probably one of the most popular financial goals connected to stock market investment). Financial security in retirement is always going to be a critical issue economically AND politically, and because of that the stock market is going to be important to a broader spectrum of the population than just the upper class.
Tangent: In fact, I'd argue that the stock market is even more important to the lower classes who do manage to invest in it, because they require more significant returns on their investments to attain financial security. If you throw a million bucks into a money market account returning 4% over 20 years, you'll more than double your money even if you don't add another cent to the pot, and be able to draw comfortably from for quite a while.
But very few of us have that amount to throw around....we need the higher longterm returns that only the stock market can deliver with any sort of relative consistency.
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