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Part a:


As you’ve read in your text (ch 8,9 and 17), 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.

Part b: 3 replies to three discussions are required , the discussion are attached in the attached word file labled “discussion board” , the reply to each discussion should be between 120 – 150 words

Discussion 1
According to Gallup (2017), the average percentage of Americans who owned stock from the
years 2001-2008 was 62% and this percentage has decreased substantially to approximately
54% from 2009-2017. Since the 2008 financial crisis, there has been a decline in stock
ownership in most demographic categories of the United States’ population except for those
Americans who are older (65 years or above) and those in upper-income brackets with a
household income of greater than $100,000 annually (Gallup, 2017). Gallup (2017) explains
that these percentages include individual stock market investments or participation in stock
market funds through a 401K retirement plan or an individual retirement account
(IRA). Gallup (2017) further explains that “middle- and upper-middle-income households
have largely driven the decline in stock ownership”. Additionally, “the percentage of 18- to
29-year-olds investing is down 11 points since before the financial crisis” (Gallup, 2017).
Currently, as of 2020, 55% of Americans held stocks in the market; however, this survey
was conducted in March and April of 2020 (Gallup, 2020). It is very unlikely that the events
of 2020, including the COVID-19 pandemic and the political turmoil which ensued, will do
much to persuade new prospective investors to part with their money given the current
financial market climate and varying degrees of risk. I would venture to say that 2021 will
perhaps witness another decline in the percentage of Americans investing in the stock
market. The volatility of the markets since the onset of the pandemic; coupled with rising
unemployment rates, and continued uncertainty about financial markets worldwide will
likely leave most Americans cautious with their savings and spending habits. Many current
adults in American have witnessed their parents’ retirement accounts take a huge hit in 2008
leaving them worried about having enough to retire on comfortably. Many of these seniors
are now having to take part-time work to supplement the income that they lost during the
financial crisis.
Figure 8-13 in our text provides an excellent depiction of the dramatic effect the financial
crisis of 2008 had on stock market indexes (Saunders & Cornett, 2019, p. 263). A stock
market index is a value for a group of stocks traded in the secondary market such as the
Wilshire 5000 Index, the NYSE Composite Index, and the Standard & Poor’s 500 Index
(Saunders & Cornett, 2019). These indexes provide investors with information on the
direction in which markets are moving and to what extent (Saunders & Cornett, 2019).
Potential investors or households that have little funds to invest or ones in which a
significant loss would be devastating to them financially are currently more likely to invest
in a high-yield savings account or something like a certificate of deposit (CD) given that
these investments will provide some growth yet, will provide them with the degree of safety
they desire. Unfortunately, at this time, given the COVID-19 pandemic and its effect on
stock market volatility, there is little that can be done to encourage Americans to invest in
stocks. In my opinion, they will make the best investment decision for themselves given
their ability to generate a steady income, the amount of disposable income they possess,
whether they are interested in investing over the long-term or short-term, and the degree of
risk that they are comfortable taking.
Gallup. (2017). U.S. Stock Ownership Down Among All but Older, Higher-Income.
Retrieved from https://news.gallup.com/poll/211052/stock-ownership-down-among-olderhigher-income.aspx
Gallup. (2020). What Percentage of Americans Owns Stock? Retrieved
from https://news.gallup.com/poll/266807/percentage-americans-owns-stock.aspx (Links to
an external site.)
Saunders, A., & Cornett, M.M. (2019). Financial markets and institutions (7thed.) pp.188.New York City: McGraw-Hill.
Reply 1
Discussion 2
Even with the improved stock market since the recession from 2008 less people are willing
to invest into stock options for several reasons. Before discussing the reasons why let us
remind ourselves about how the recession heavily affected United States citizens for a two
year period. During this two year period there were about 8 million jobs lost. There were
many bankruptcies filed as businesses and lives were being ruined by this financial crises.
Many neighborhoods were lost because of houses being bough out by banks as people
could no longer afford to live in their own homes because of losing their jobs (DePillis,
2017). As the economy would eventually improve for the best a decade later there are still
traumatic experiences and hesitations to invest in the market from Americans to this day.
Despite people earning more wages now then they did 10 years ago, people are not able to
save like they intend to. The household net worth dropped by 40% between 2007 to 2013
with only a slight recovery in 2016. Another factor mentioned of the major statistic of net
worth is the wealth inequality due to race. Black households are holding one-tenth of assets
that white households hold. The wealth gap level increased in 2016 to its widest point ever.
People are not feeling comfortable with their retirement security that they are able to move
forward to make investments that they do not need to make with their current financial
status (DePillis, 2017).
Someone one to follow the advice of investment experts it would be wise when deciding to
invest in the stock market. In today’s society less than half of young Americans are investing
their money into stocks. This is a result from the previous recession in 2008. The reason
being for the lack of investments is seeing how people, stockholders, lost trillions of dollars
from investing into the stock market. The Dow Jones fell more than 50% from 2007-2009
which is one of the main affects of why young people are not investing into stocks. Before
the crash up to 52% of Americans under 35 years of age owned stocks, after by 2017 and
2018 only 37% owned stocks. It is important to know that investing in the stock market is a
long-term investment which means it does not mean you get rich quick. Even though less
young people are willing to take the risk of investing with the proper education and advice
from successful people that invest in the market are beneficial for the number of young
investors to increase. (Carter, 2018)
The market is not as stable because of the current state of the economy due to COVID-19
which is frustrating because as a young person I want to be able to explore my options to
become more financially stable. With the uncertainty of how the market will look like,
despite projections made, will be interesting to see what is the best decision to invest my
money into in regards to the stock market. At the end of the day I am optimistic to become
successful whether it is in stocks, or investing in a house down the road. Regardless the
information provided proves why people are not investing because they either do not have
the means to do so anymore or because it is too much of a risk to do it again and lose that
investment due to a crash in the stock market. These are the stresses people have to think
about in order to have financial breathing room in today’s society.
Carter, S. M. (2018, May 16). Younger Americans aren’t investing in the stock marketresearchers think this is why. Retrieved February 8, 2021, from
DePillis, L. (2017, December 1). 10 years after the recession began, have Americans
recovered? Retrieved February 8, 2021, from
Discussion 3 :
For everyone, the past decade has meant something different. Some of us may have been in
high school, college, or even in the middle of their career. I remember the Great Recession
of 2008 vividly. My children were 2,4, and 6. I was working as a nurse in the Emergency
Department every other weekend. My salary was sufficient to pay the bills, but there was
not any extra money to invest. In fact, my husband and I had to trail back our investments
into our children’s 529 fund. It was a blessing to have had invested the money into our
children’s future but now we faced financial concerns. “To call the first decade of the 21st
unkind to markets and the economy would be a massive understatement. It was a debacle.
We lived through two recessions, including the worst economic crisis since the Great
Depression, and two enormous stock market crashes which saw stocks drop by half each
time” (Carlson, 2019). “Those brutal crashes bookended the decade of the aughts, and that
led to a lost decade in the S&P 500, which saw the largest stocks in the U.S. as a whole fall
nearly 10% in total from 2000 to 2009. Although the stock market had rallied mightily off
the March, 2009 lows by the end of that year, many were predicting more of the same dose
of pain in terms of crashes, volatility, and economic calamities in the years ahead” (Carlson,
2019). “Factors behind the U.S. dominance in world stock markets changed in the mid2000’s. Strict new U.S. regulations such as Sarbanes-Oxley increased the cost of operating in
the United States and resulted in a significant drop in IPOs of foreign firms in the United
States. Further, U.S. economic growth slowed from an annual rate of over 4 percent in the
first two quarters of 2006 to .25% in the first quarter of 2007. A sharp turn in the U.S.
subprime housing market was a major factor for the slow U.S. growth. During this period
growth strengthened in most other major countries including the euro” (Saunders,
2019). “While the creation of the euro has had a significant effect throughout Europe, it has
also had a notable impact on the global financial system. The first decade of the 2000s, as the
United States experienced an increasing national debt, rapid consumer spending, and a
current account deficit big enough to bankrupt most other countries, the euro increased
value by 35 percent against the US dollar.” (Saunders, 2019). In my true opinion, our salaries
may be higher than our parents, but the rate of inflation is much greater now. The cost of
education and the housing market has increased to points where people cannot afford to pay
bills let alone invest. College graduates are working to pay off college loans that exceed the
cost of living. There is no extra money to invest. With the instability of the market,
different age groups are deferring investing their money. We need to make the dollar
stronger and build back the economy. We cannot survive with only one class of people
being able to invest that being higher class. International markets do play a role in the
financial trend of our country. Building a stronger America with stronger currency value
will enable us to invest our money in hopes we will see a return for all classes.
Carlson, B. (2019, December 17). For Investors, the Past Decade Was a Marvelous Run. But
That Tells Only Half the Story. Fortune. https://fortune.com/2019/12/17/investing-decadein-review-s-p-500-tech-fed-interest-rates/ (Links to an external site.).
Saunders, A. & Cornett, M.M. (2019). Financial markets and institutions. (7th ed., pp
276). New York City: McGraw-Hill.

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