An RSM analysis of Federal Reserve data found that households in the top 20% of income earners own about $55 trillion in stocks and mutual funds, underscoring the gap between stock market gains and the finances of most Americans.
By yourNEWS Media Newsroom
The nation’s highest-earning households now hold the overwhelming majority of U.S. stock and mutual fund wealth, according to an RSM analysis of Federal Reserve data, highlighting how stock market gains remain concentrated among Americans at the top of the income scale.
Households in the top 20% of income earners own about 87% of stocks and mutual funds, valued at roughly $55 trillion. That is up from about $45 trillion in June 2025, according to the analysis.
The top 20% refers to households earning about $160,000 or more annually, while the bottom 80% includes households below that income level, based on Federal Reserve income distribution data.
The bottom 80% of workers and income earners hold about $8 trillion in stocks and mutual funds, up from $7 trillion last year. While that represents a gain, the dollar increase is far smaller than the growth seen among higher-income households.
RSM chief economist Joe Brusuelas said in a new post that rising stock values are increasing wealth at the top but are unlikely to do much to improve the financial outlook for most Americans or significantly strengthen the broader economy.
Much of the stock and mutual fund wealth held by households functions as long-term paper wealth. Investors and retirement savers often avoid selling assets to defer capital gains taxes or other tax consequences, meaning market gains do not necessarily translate into immediate spending.
The concentration of stock ownership also limits the economic impact of a rising market. When stock values climb, the largest gains go to wealthier households, which typically spend a smaller share of those increases than lower- and middle-income households would.
That dynamic is often described as the wealth effect, in which higher asset values make people feel richer and can encourage additional spending. Brusuelas wrote that the effect exists but is limited because the largest gains accrue to people who are less likely to sharply increase consumption.
Researchers at the Federal Reserve identified the same phenomenon in a paper last year, saying it helped explain the weak recovery in consumer spending after the financial crisis.
The stock market remains a widely watched economic measure, even though its gains may not reflect the financial conditions facing most households.
President Donald Trump has frequently used market performance as a sign of economic strength. During a rally Tuesday in Pennsylvania, Trump said his push to resolve the Iran conflict was connected to the market’s reaction to the possibility of peace.
“All I know is every time we talked about the possibility of peace, the stock market shot up like a rocket ship,” Trump said.
The RSM analysis shows why stock market performance can offer only a partial view of the economy. Rising equities can add trillions of dollars in wealth, but most of those gains remain concentrated among higher-income households rather than flowing broadly through the economy.