- The Washington Times - Thursday, January 23, 2003

Slightly more than half of U.S. households owned stock in 2001, compared with about a third only a decade earlier, as the Wall Street boom of the 1990s pushed stock ownership to record levels.
The big rise in stock prices, plus the longest economic expansion in history, helped to boost family balance sheets, the Federal Reserve reported yesterday in the government's most extensive look at wealth in the country.
The typical family's net worth the difference between household assets and liabilities rose to $86,100 in 2001, a gain of 10.3 percent from 1998 after removing the effects of inflation.
Family incomes also were up in 2001, with the median family earning $39,900, a gain of 9.6 percent from 1998.
As regards both net worth and incomes, the richer did far better than those at the bottom of the income scale, a trend that has been in place for some time.
"We are richer than we used to be, but the gap between the rich and the poor appears to be growing," said David Wyss, chief economist at Standard & Poor's in New York.
By net worth, the typical family in the bottom 20 percent of income distribution saw its net worth rise 25.4 percent to $7,900. In contrast, the typical family in the highest 10 percent of income levels had a 69.3 percent increase of its net worth to $833,600.
The gains in household wealth and incomes were attributed to multiple factors, including the Wall Street boom of the 1990s. Stock prices peaked in the spring of 2000, and investors have since suffered three straight years of losses on Wall Street, something that last happened at the end of the Great Depression in the 1930s.
The Fed survey was taken from May through December of 2001, so it does not capture the high point for stock portfolios. It would reflect fatter balance sheets for many investors than they now have.
The survey showed that the percentage of U.S. families with stock holdings reached 51.9 percent in 2001, the first time that more than half of the nation's households owned stocks, either directly or indirectly through their pension funds.
The percent of families owning stocks was 48.9 percent during the previous Fed survey in 1998 and 36.7 percent in 1992.
While the 1920s had a soaring market that crashed in 1929, economic historians have said that the number of families owning stock never topped 10 percent during that boom period.
Stock ownership is at a record level, but most people still participate indirectly through their 401(k) retirement accounts or other mutual funds.
The percent of families holding stock directly is 21.3 percent, while 52.2 percent of all families hold retirement accounts.

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