Investing Statistics – 10 Interesting Facts And Trends
The world as we know it today is built on a foundation of investment. Individuals invest to put their money to work, financial firms invest to support new companies and try to beat the market, and new investment products are appearing relatively frequently to create new ways to invest.
In this article, we’ll take a look at 10 interesting investing statistics that shed some light on the state of investing in the US today.
Investing is an enormous topic that includes everything from the stock market to real estate. It also encompasses individual Americans who want to save for retirement, professional stock traders, and giant financial firms that move billions of dollars around each day.
We’ll focus primarily on everyday American investors in this article. Individual investors are most representative of how Americans as a whole invest their money and paint a picture of how investment trends are changing. It’s also worth keeping in mind that much of the money held by major financial firms belongs to individual American investors.
Investing Statistics – Highlights
Here are some of the most interesting numbers that offer a snapshot of investing in the US right now:
- 58% of Americans participate in the stock market
- ETFs now have more than $9 trillion in assets under management, but 46.4% of Americans still own mutual funds
- Hedge funds have $3.8 trillion in assets under management
- 21% of Americans have bought cryptocurrency
- The S&P 500 has a long-term average return of 11.88% per year
1. 58% of Americans are Invested in the Stock Market
58% of Americans report owning stocks, up from 55% in 2020 but down from a high of 63% in 2004.
However, stock ownership isn’t equal among all demographics. 89% of households with an annual income of $100,000 or more own stocks, while only 25% of households with an annual income of $25,000 or less own stocks. 64% of white Americans are invested compared to 46% of non-white Americans.
2. Only 41% of Workers Contribute to a 401(k)
The US Census Bureau estimates that only 41% of workers contribute to a 401(k) despite the fact that 79% of employed Americans have access to an employer-sponsored 401(k) plan. In addition, only 41% of Americans have a traditional or Roth IRA.
The median 401(k) balance for Americans aged 55-64 is $84,714, far less than the amount most individuals need to retire.
3. ETFs are Growing Fast
(Sources: Wall Street Journal, New York Stock Exchange)
Exchange-traded funds (ETFs) have been around for decades, but they’ve captured the attention of investors in the past 10 years. The total amount invested with ETFs surpassed $9 trillion in 2021, up from $1 trillion in 2011. There were just over 120 US ETFs in 2003, but today there are 2,952 ETFs listed in the US alone. According to the New York Stock Exchange, the average daily value of ETF trading in the US is $202.5 billion.
4. Mutual Funds Remain Popular
Net flows to mutual funds have declined significantly in the past two decades as ETFs have grown in popularity. However, mutual funds remain extremely popular investments. 46.4% of American households own mutual funds compared to only 7% for ETFs.
ETF investors tend to skew younger than mutual fund investors. Only 36% of ETF-owning households in the US are headed by adults over 60.
5. Real Estate is More Popular than Stocks
Although stocks get a lot of attention from investors, real estate is actually the most popular investment among Americans. 35% of individuals say they think real estate is the best long-term investment, compared to 21% for stocks and mutual funds, 17% for savings accounts, and 8% for bonds.
6. Hedge Funds are on the Rise
(Sources: Reuters, NASDAQ, Institutional Investor)
Hedge funds have been growing in both size and trading activity. As of 2021, hedge funds controlled $3.8 trillion in assets under management. Hedge funds are responsible for an estimated 7.7% of daily trading volume in the US stock market, and trading volume has hit multiple all-time highs in 2022. These funds hold around 3.0% of all US stock shares.
7. More Americans are Trying Crypto
(Sources: CNBC, The Motley Fool)
As of 2022, 21% of Americans report owning or trading cryptocurrency. However, only 19% of people surveyed say they view cryptocurrency positively. Of investors who have not traded cryptocurrency previously, 41% say they are likely to give this new asset class a try within the next year.
8. Bonds and Savings Accounts are Losing Favor
(Sources: MarketWatch, The Motley Fool)
Despite the fact that it’s easier than ever for most individual investors to access bond markets, only 1.3% of American households are directly invested in bonds. That’s down from 5% in 1989.
An estimated 71% of Americans have savings accounts. However, there is relatively little money in these accounts. The median savings account value is just $4,500 and 50.7% of Americans have less than $5,000 in their savings accounts.
9. The US Stock Market Delivers 11.88% Per Year on Average
(Source: New York University)
Since the S&P 500 index launched in 1957, it has delivered an average annualized return of 11.88%. The index’s best year saw an annual return of 37.2% (in 1995), while the worst year saw an annual return of –36.5% (in 2008).
10. Foreign Investors have $4.47 Trillion in US Markets
(Source: Bureau of Economic Analysis)
Foreign investors play a significant role in US markets. Investors abroad have $4.47 trillion in direct investment in US stocks, real estate, and other assets. $3.18 trillion of this investment comes from Europe, while Japan is responsible for $690 billion and Canada for $528 billion.
US investors have $6.09 trillion invested abroad, with around 65% of that investment flowing to Europe.
Conclusion: Investing Statistics
A majority of Americans are involved in investing and, for many, financial markets are more accessible than ever before. Investment trends are changing thanks to the rise of ETFs and cryptocurrency, but most individuals have stuck with more traditional investments like real estate, stocks, and mutual funds.