The S&P 500 (^GSPC) is around its all-time high, hitting over 3,600 in intraday trading this week following the Pfizer news and a Joe Biden victory in the presidential election.

The index’s year-to-date performance is over 8%, which is great for people who own stocks.

The narrative of whether the stock market represents the health of the economy has been in play yet again lately, as this year saw record unemployment and a recovery that has a long way to go. And economists are sounding the alarm.

In a recent viral TikTok video, 2020 Democratic primary candidate Andrew Yang pointed out that only half of Americans own stocks, and that the S&P 500’s massive bounce-back after plunging over 30% in late February and early March didn’t represent the economic health of a huge swath of Americans.

One interesting statistic, however, is the fact that 52.6% of Americans owned stock in 2019, among the highest of all time, after 2007 and 2001, when it was just over 53% before the market’s crashes.

But even if the numbers showed that 90% of Americans owned stock, they wouldn’t tell the whole story.

Owning stock doesn’t mean owning a lot of stock

The stats that show half of all Americans own stock come from the Federal Reserve’s Survey of Consumer Finances. But that survey also shows how varied people’s holdings are — making the simple question of “do you own stock?” less useful than knowing how much they own.

According to the survey’s 2019 data, people in the lowest-income quartile have stock holdings of around $2,350 on average. People between the 25th and 50th percentiles have $8,700 in stocks. People in the 75th to 90th percentiles have $131,800 on average, and the top 10% holds an average $781,500.

Recent historical data echoes these findings. According to a 2017 NBER paper by NYU Stern’s Edward Wolff, 91% of all stocks were owned by households earning $75,000 or more and just “27% of the middle quintile and 4% of the bottom quintile” had stocks worth more than $10,000.

Much of this stock ownership, Wolff said, was due to 401(k) and IRA plans.

This aligns with what we know about stock ownership in general, which also mirrors how wealth is distributed.

For years, investing app Robinhood has given away a “free stock” to people who sign up, usually worth around $3. That means that even without actively buying anything or trading, these people now participate in the stock market — even if a positive day for the S&P 500 might only net them a few cents, if that.

On top of that a new host of retail investors emerged in 2020, flocking to trading platforms like Robinhood, Schwab, and TD Ameritrade, with many novices putting chunks of their $1,200 stimulus checks into their brokerage accounts and getting into trading.

While these new people may now be considered the “investor class,” if you look at the surveys of consumer finances that ask “do you own stocks?,” the answer “yes, I own stocks” may not mean that much.

Looking at average balances in brokerage accounts tells an important part of this story. According to Yahoo Finance’s sister site TechCrunch, a typical Robinhood account might hold $1,000 to $5,000, whereas other firms that may have fewer accounts — Morgan Stanley and E*Trade, for example — have far bigger average balances, $900,000 and around $70,000, respectively.

Clearly, not every respondent in the “half of Americans own stocks” survey is speaking from equal footing — an argument that deepens Yang’s position that there’s a fundamental disconnect between the market’s performance and the economy.

When the S&P 500 goes up, most of the gains go to a relative few.

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Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, personal finance, retail, airlines, and more. Follow him on Twitter @ewolffmann.

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