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Equity Ownership in America

Investment Company Institute and the Securities Industry Association

Equity Ownership in America

Fall 1999

Investment Company Institute
and the

Securities Industry Association

Copyright © 1999 by the Investment Company Institute and Securities Industry Association

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Chapter 1: Overview of Equity Owners . . . . . . . . . . .52 Appendix A: Detailed Research Methodology . . . . . . . . . . . . . . . . . . .41 Stock Mutual Fund Transaction Activity Outside Employer Plans in 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 Characteristics of Equity Investing . .44 Most Recent Stock Mutual Fund Purchase or Sale Outside Employer Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 Views on Equity Investing . . . . . . . . . . . . . . . . . . . . . . . . . .48 Chapter 4: Owners of Individual Stock and Stock Mutual Funds Inside Employer-sponsored Retirement Plans . . . . . . . . . . . . . .38 Chapter 3: Owners of Stock Mutual Funds Outside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24 Equity Owners Who Sold 12 or More Equities in 1998 . . . . . . . .21 Equity Owners by Level of Transaction Activity in 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Characteristics of Owners of Individual Stock Outside Employer Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Equity Owner Changes to Employer Plans in 1998 . . . . .23 Equity Owners by Purchase of Equities in 1998 . . . . . .36 Most Recent Individual Stock Purchase or Sale Outside Employer Plans . . . . . . . . . . . . . .Table of Contents List of Figures . . .19 Equity Transaction Activity in 1998 . . . .13 Characteristics of Equity Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Ownership of Equities by U. . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 Individual Stock Transaction Activity Outside Employer Plans in 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Equity Ownership in America iii .49 Characteristics of Owners of Stock Mutual Funds Inside Employer Plans . . . . . . . . . . . . . . . . . . . . . . . v Introduction . .29 Equity Owners by Internet Purchase or Sale of Equities in 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Characteristics of Owners of Individual Stock Inside Employer Plans . . . . . . . . . . . . . . . 41 Characteristics of Owners of Stock Mutual Funds Outside Employer Plans . Households . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 Chapter 2: Owners of Individual Stock Outside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S. . . . . . . . . . . . . 1 Summary of Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . .96 Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .94 Household Financial Assets . . . . . . . . . . . . . . . . . . . . . . . .76 Appendix D: Detailed Tabulations for Individual Stock Owners by Key Demographic Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100 iv Equity Ownership in America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70 Household Financial Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Appendix C: Detailed Tabulations for All Equity Owners by Key Demographic Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82 Household Financial Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Individual Stock Owners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68 Household Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Appendix B: Detailed Tabulations for All Equity Owners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86 Region . . . . . . . . . . . . . . . . . . .98 Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . .92 Household Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and Stock Mutual Fund Shareholders . . . . . . .80 Household Income . 67 Investment Decisionmaker . . . 79 Investment Decisionmaker . . . . . . . . . . . . . . . . . . . . . . . . .84 Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72 Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Investment Decisionmaker . . . . . . . . . . . . . . .74 Region . . . . . . . . . . . . . . . . . . . . . .88 Appendix E: Detailed Tabulations for Stock Mutual Fund Shareholders by Key Demographic Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Individual Stocks. . . 7 Household Assets in Equities . . . . . . . . . . . . . 27 Characteristics of Equity Owners Who Purchased Equities in 1998. . . . . . 11 Stock Mutual Fund Assets of Investors Owning Stock Mutual Funds . . . . . . . . . . . . . . . . . 5 Year of First Equity Purchase . . . . . . . . . . . . . . . . . 1953-1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Chapter 1: Overview of Equity Owners Figure 12 Figure 13 Figure 14 Figure 15 Figure 16 Figure 17 Figure 18 Figure 19 Figure 20 Figure 21 Figure 22 Figure 23 Figure 24 Figure 25 Figure 26 U. . . . . . . . . . . . . . 1980-1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Characteristics of Equity Owners by Number of Equity Transactions . . . . . . . .S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . in 1999 . . . . . 23 Transaction Activity in 1998 by Number of Equity Transactions . . . . . . . . . . . . . . . . . . . . . and Stock Mutual Funds Owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Types of Individual Stock Transactions Conducted by Individual Stock Owners in 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Assets in All Equities. . 26 Transaction Activity in 1998 by Equity Purchasers . . . . . . . . . . . . . . 6 Summary of Characteristics of Equity Owners by Generation . . . . . . . . . . . . . . . . 28 Characteristics of Equity Owners Who Conducted 12 or More Equity Sales in 1998 . . . 32 Equity Ownership in America v . . . . . . . . . . . . . . . . . . . . . . . . 20 Transactions in 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Ownership of Individual Stock in Foreign Companies and International or Global Mutual Funds . 17 Number of All Equities. . . . . . . . . . . . . . . . 30 Characteristics of Equity Owners by Use of the Internet to Conduct Equity Transactions in 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Summary of Characteristics of Equity Owners Who Made Transactions in 1998. . . . . . . . . 10 Individual Stock Assets of Investors Owning Individual Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Types of Stock Mutual Fund Transactions Conducted by Stock Mutual Fund Shareholders in 1998. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Stock Market Performance Indices. . . . . . . . . 8 Equity Transaction Activity in 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S. . . . . . . . . . . . 2 Household Ownership of Equities. . . Household Ownership of Equities in 1999. . . . . . . . . . . . . . . . . . . . . . . . . . Individual Stock. . . . . . . . . . . . . . 19 Views on Equity Investing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Summary of Findings Figure 4 Figure 5 Figure 6 Figure 7 Figure 8 Figure 9 Figure 10 Figure 11 Equity Ownership in the U. . . . . . .List of Figures Introduction Figure 1 Figure 2 Figure 3 30-Year Treasury Yield. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1980-1998 . . . . . . . . . . . . . . . . . . . . . 13 Characteristics of Equity Owners . and Stock Mutual Funds .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Investment Characteristics—Ownership of Individual Stock Outside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . .Chapter 2: Owners of Individual Stock Outside Employer-sponsored Retirement Plans Figure 27 Figure 28 Figure 29 Figure 30 Figure 31 Figure 32 Figure 33 Figure 34 Figure 35 Investor Characteristics—Ownership of Individual Stock Outside Employer-sponsored Retirement Plans . 46 Number of Internet Purchases or Sales in 1998—Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Purchase Channels Used—Ownership of Individual Stock Outside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Source of Money for Most Recent Purchase in 1998—Ownership of Individual Stock Outside Employer-sponsored Retirement Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Internet Use for Purchases and Sales in 1998—Ownership of Individual Stock Outside Employer-sponsored Retirement Plans . . . . . . . 47 vi Equity Ownership in America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Source of Money for Most Recent Purchase in 1998—Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Purchases and Sales in 1998—Ownership of Individual Stock Outside Employer-sponsored Retirement Plans . 39 Number of Internet Purchases or Sales in 1998—Ownership of Individual Stock Outside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Transaction Activity in 1998—Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . 45 Purchases and Sales in 1998—Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Investment Characteristics—Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans . . . . . . 43 Purchase Channels Used—Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . 39 Disposition of Proceeds from Most Recent Sale in 1998—Ownership of Individual Stock Outside Employer-sponsored Retirement Plans. . . . . 36 Transaction Activity in 1998—Ownership of Individual Stock Outside Employer-sponsored Retirement Plans . 45 Internet Use for Purchases and Sales in 1998—Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans . . . . . . 40 Chapter 3: Owners of Stock Mutual Funds Outside Employer-sponsored Retirement Plans Figure 36 Figure 37 Figure 38 Figure 39 Figure 40 Figure 41 Figure 42 Figure 43 Figure 44 Investor Characteristics—Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Disposition of Proceeds from Most Recent Sale in 1998—Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans. . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Investment Characteristics—Ownership of Stock Mutual Funds Inside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Investor Characteristics—Ownership of Stock Mutual Funds Inside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and Stock Mutual Fund Shareholders . . . . . . . . . . . . 71 Characteristics of Equity Owners by Household Financial Assets. . . . . . . . . . . . Individual Stock Owners. . . . . . 55 Characteristics of Payroll Changes in 1998—Ownership of Equities Inside Employer-sponsored Retirement Plans . . . . . . . . 50 Investment Characteristics—Ownership of Individual Stock Inside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . 60-61 Financial Characteristics of All Equity Owners. . . . . . Individual Stock Owners. . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Equity Ownership Characteristics by Household Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Appendix B: Detailed Tabulations for All Equity Owners. . . . . . . . . . . . . . . . . . . . . . . . . 55 Number of Payroll Contribution Changes Made in 1998—Ownership of Equities Inside Employer-sponsored Retirement Plans . . . . . 56 Characteristics of Account Balance Allocation Changes—Ownership of Equities Inside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Characteristics of Equity Owners by Household Income . . . . . . . . . . . . . . . . . . 56 Number of Allocation Changes Made to Account Balance in 1998—Ownership of Equities Inside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . and Stock Mutual Fund Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . 54 Payroll Contribution Changes in 1998—Ownership of Equities Inside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . and Stock Mutual Fund Shareholders Figure 56 Figure 57 Demographic Characteristics of All Equity Owners. . . . . . . . . . 55 Allocation Changes Made to Account Balance in 1998—Ownership of Equities Inside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Appendix A: Detailed Research Methodology Figure 55 Sampling Error at the 95 Percent Confidence Level for Selected Percentages of Responses. . . . . . . 62-66 Appendix C: Detailed Tabulations for All Equity Owners by Key Demographic Variables Figure 58 Figure 59 Figure 60 Figure 61 Figure 62 Figure 63 Characteristics of Equity Owners by Investment Decisionmaker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Equity Ownership in America vii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Individual Stock Owners. . . . . . . . . . . . . . . . . . . . . . . . . by Sample Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chapter 4: Owners of Individual Stock and Stock Mutual Funds Inside Employer-sponsored Retirement Plans Figure 45 Figure 46 Figure 47 Figure 48 Figure 49 Figure 50 Figure 51 Figure 52 Figure 53 Figure 54 Investor Characteristics—Ownership of Individual Stock Inside Employer-sponsored Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Equity Ownership Characteristics by Household Financial Assets . . . . . . . . . . . . . . . . . 68 Equity Ownership Characteristics by Investment Decisionmaker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. 81 Characteristics of Individual Stock Owners by Household Income . . . . . 88 Individual Stock Ownership Characteristics by Region . . . . . . . . . . . . . . . 86 Individual Stock Ownership Characteristics by Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 Characteristics of Individual Stock Owners by Household Financial Assets . . . . . . . . 84 Individual Stock Ownership Characteristics by Household Financial Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Individual Stock Ownership Characteristics by Investment Decisionmaker . . . . . . . . . 89 Appendix E: Detailed Tabulations for Stock Mutual Fund Shareholders by Key Demographic Variables Figure 78 Figure 79 Figure 80 Figure 81 Figure 82 Figure 83 Figure 84 Figure 85 Figure 86 Figure 87 Characteristics of Stock Mutual Fund Shareholders by Investment Decisionmaker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 Stock Mutual Fund Ownership Characteristics by Household Income . . . . . . . . . . . . 87 Characteristics of Individual Stock Owners by Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Appendix D: Detailed Tabulations for Individual Stock Owners by Key Demographic Variables Figure 68 Figure 69 Figure 70 Figure 71 Figure 72 Figure 73 Figure 74 Figure 75 Figure 76 Figure 77 Characteristics of Individual Stock Owners by Investment Decisionmaker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Individual Stock Ownership Characteristics by Household Income . . . . . . . . . . . . . . . . . . . . 100 Stock Mutual Fund Ownership Characteristics by Region . . . . . . . . . . . . . . . . . . . . . .Figure 64 Figure 65 Figure 66 Figure 67 Characteristics of Equity Owners by Generation . . . . . . . . . . . . . . 99 Characteristics of Stock Mutual Fund Shareholders by Region. . . . . . . . . . . . . . . . . . . . . . . . . . 98 Stock Mutual Fund Ownership Characteristics by Generation. . . . . . . . . 97 Characteristics of Stock Mutual Fund Shareholders by Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 Stock Mutual Fund Ownership Characteristics by Investment Decisionmaker . . . . . 76 Equity Ownership Characteristics by Region . . . . . . . 85 Characteristics of Individual Stock Owners by Generation. . . . . . . . . . . . . . . . . 95 Characteristics of Stock Mutual Fund Shareholders by Household Financial Assets. . . . . . . . . . . . . 75 Characteristics of Equity Owners by Region. . 96 Stock Mutual Fund Ownership Characteristics by Household Financial Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Equity Ownership Characteristics by Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 viii Equity Ownership in America . . . . . . . . 93 Characteristics of Stock Mutual Fund Shareholders by Household Income . . . . . . . . . . . . . . . . . . . . . . . . . .

automatic investment programs. nearly all (97 percent) 401(k) plans offered equity investments. in 1999 is based on data from the survey presented in this report. Employee Benefit Research Institute and the Investment Company Institute.6 percent increase.7 million. 66 percent of U. Retirement Confidence Survey 1998 (Employee Benefit Research Institute and Matt Greenwald and Associates).S.2 Several developments have contributed to the expansion of equity ownership. and the Nasdaq Composite indices each gained more than 900 percent between 1980 and 1998 (Figures 1 and 2). the first of whom turn 65 in 2011.6 Moreover. workers to individual stock and stock mutual funds. For example. Total holdings of equities by U. the highest percentage of total household assets in the postWorld War II era (Figure 3).9 percent in 1998. 401(k) Plans: Survey Report on Plan Design (Buck Consultants). the number grew to almost 78. defined-contribution plans — most of which include equity investment options — introduced many U. definedbenefit pension plans to self-directed. 3 4 5 6 Equity Ownership in America 1 .Introduction Bull Market.S. Declining interest rates and the 19-year bull market of rising stock prices prompted many U.S. financial services companies have made it easier to purchase stocks and mutual funds.9 percent in 1980. the shift from employer-directed. Finally.4 million Americans owned stocks directly or through mutual funds. many members of the Baby Boom Generation.2 percent of household financial assets in 1980 to 34. the S&P 500. In 1983. 1 2 Shareownership 1985 (New York Stock Exchange). Other Developments Fuel Growth In Equity Ownership Equity ownership in the United States has grown dramatically over the past two decades. The number of individuals owning stocks in the U.S. households rose from 17. Unpublished data from a 1998 Investment Company Institute survey of 401(k) plan participants. an estimated 42.5 and in 1998. 1998 Plan Year. The Dow Jones Industrial Average.1 percent in 1998 from 11.S. As of 1997. by offering online portfolio management.4 Also in that year. began investing in equities to finance their retirement years.1 By 1999. households to purchase and hold equities. more than four-fifths of 401(k) plan participants held equities in their plan portfolios. and low minimums to open an account. Federal Reserve Board.3 In addition. the yield on 30-year Treasury bonds declined to 5. workers participated in retirement programs that offer tax-deferred accounts. an 85. for example.

L. 1980-1998 (percent.P. 2 Equity Ownership in America . 1980-1998 (percent) 1200 Nasdaq Composite 1000 800 Dow Jones Industrial Average 600 S&P 500 400 200 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Note: Indexes are set at 100 in 1980. FIGURE 2 Stock Market Performance Indexes. year-end) 16 14 12 10 8 6 4 2 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Source: Bloomberg.P.FIGURE 1 30-Year Treasury Yield. Source: Securities Industry Association and Bloomberg L.

1953-1998 (percent of U. or SIMPLE IRAs. and have over 73 million individual shareholders. Traditional. SEP-IRAs. or local government plans.S. and stock ownership characteristics of equity owners. To learn more about Americans who own equities. 8 9 Equity Ownership in America 3 . federal. and eight sponsors of unit investment trusts. Employee Benefit Research Institute. the Investment Company Institute7 and the Securities Industry Association8 conducted a comprehensive survey that sought to: Estimate the incidence of equity ownership among U. state. The Securities Industry Association (SIA) is the national association of the North American securities industry. and differentiate between those owning stock directly and indirectly through mutual funds. Its membership as of September 1.009 trillion.733 open-end investment companies (“mutual funds”). 7 The Investment Company Institute (ICI) is the national association of the American investment company industry. 483 closed-end investment companies. and the Investment Company Institute. Collectively. Identify the extent of individual stock and stock mutual fund transaction activity in 1998. Examine the use of the Internet to conduct equity transactions. Roth. Employer-sponsored retirement plans include 401(k) plans.S. and Education IRAs are not employer-sponsored retirement plans. 1999 included 7. 403(b) plans. specialists. and pension plans.FIGURE 3 Household Ownership of Equities. broker-dealers. and mutual fund companies. SAR-SEPs. accounting for approximately 95 percent of total industry assets. thrift. Its mutual fund members have assets of about $6. financial. households.9 Describe the demographic. household financial assets) 40 35 30 25 20 15 10 5 0 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 Source: Federal Reserve Board. and. both inside and outside employer-sponsored retirement plans. Members of SIA include investment banks. Note: 1953 is the earliest date for which data is available. SIA members account for approximately 90 percent of securities firms’ revenue and manage the accounts of more than 50 million investors and tens of millions of investors indirectly through corporate.

11 10 Households include related family members sharing a housing unit. See footnote 32 in Appendix A: Detailed Research Methodology for a detailed definition of the term “household.S. and unrelated persons who are partners.842 household financial decisionmakers was asked whether their households owned equities.10 A random digit dial (RDD) national probability sample was used to generate a representative sample of equity owners nationwide. or 48. Separately. Of these. persons living alone. The multiplier for number of individuals per household owning equities was 1.2 percent. The number of individuals who owned equities in a household was determined by asking respondents how many persons in their households owned each type of equity.6. 2.943 completed the entire survey and 393 completed part of it.” See Appendix A: Detailed Research Methodology for more information. an additional 393 interviews were conducted with high-net-worth equity owners. households but were not included in any other analyses. Weights were applied to ensure that the high-net-worth interviews were represented in the total sample in proportion to their incidence in the entire U. A total of 4. The overall sampling error for the survey is plus or minus 2 percent at the 95 percent confidence level.Research Methodology Equity owners are defined in this study as households owning either publicly traded stock or stock mutual funds. indicated their households did own equities — 1.336 decisionmakers. 11 4 Equity Ownership in America . The 393 partial interviews with known equity owners were included in the estimate of the incidence of equity ownership among U.S. population. All interviews were conducted in January and February 1999 with the household decisionmaker most knowledgeable about savings and investments.

6 percent from 42. vol. of all U. An estimated 49.S..8 48.Summary of Findings Overall Ownership Equity ownership is on the rise. Households that Own Equities (percent of U.S. Robert B.13 In 1999.0 percent of all U. 12 13 The 1983 data is from Shareownership 1985 (New York Stock Exchange) and the 1999 data is from this report. up 85.12 Nearly half of all U. al.7 million individuals owned equities in early 1999.5 percent owned equities outside such plans.7 million Note: A total of 4. 31. or 48.336 who qualified as equity owners participated in the in-depth survey. Only the 2.S.2 Own equities Only own individual stocks 47 Only own stock mutual funds Number of individuals owning equities = 78. 689. Avery.2 million. households) Types of Equities Owned (percent of all equity owners) 38 Own both individual stocks and stock mutual funds Do not own equities 15 51. “Summary Descriptions of the 1983 Survey Results.S.S. households owned equities directly or indirectly through stock mutual funds in early 1999 (Figure 4). et. FIGURE 4 Equity Ownership in the U. 70 (September 1984) p. approximately 19. households own equities.842 households were interviewed to collect this information.8 percent owned equities through employersponsored retirement plans and 35. A total of 78. In 1983.2 percent.4 million in 1983. Equity Ownership in America 5 . households owned equities.” Federal Reserve Bulletin. in 1999 U.S.

and have a greater ownership rate for individual stocks outside retirement plans than other equity owners. Only 18 percent made their first equity investment after 1995 (Figure 5). Nineteen percent of equity owners are members of Generation X (age 19 to 35). and 5 percent are members of the GI generation (age 75 or older). Most equity owners are married.000 and household financial assets of $85. employed. 48 percent are Baby Boomers (age 36 to 54). share the responsibility in 54 percent of equityowning households. have more household financial assets. Generation X equity investors typically allocate a greater portion of their financial portfolios to equities than older generations (Figure 6). Northeastern equity owners tend to be older. usually married couples. 28 percent are from the Silent Generation (age 55 to 74). 26 percent in the Midwest. Co-decisionmakers.FIGURE 5 Year of First Equity Purchase (percent of all equity owners) 1996 or later 18 54 28 1990-1995 Before 1990 Number of respondents = 2. 6 Equity Ownership in America .000. investment decisionmaking is shared. The typical equity owner is 47. Thirty-three percent of equity owners live in the South. The largest percentage of equity owners reside in the South. and females make the decisions 20 percent of the time. and 28 percent made their first purchase between 1990 and 1995. has household income of $60. Eighty percent are covered by employer-sponsored retirement plans. Most equity owners are seasoned investors. and 16 percent in the Northeast. Although fewest in number. 25 percent in the West. In most equity-owning households. Fifty-four percent first purchased equities before 1990. Males make the decisions in 26 percent of households. Nearly half of all equity owners are Baby Boomers. Generation X equity owners have a more aggressive investment approach than older generations. and college graduates.122 Demographics Equity owners tend to be middle-aged with moderate income and assets. and 53 percent own IRAs.

Fifty-four percent of equity-owning households own stocks directly and 85 percent own stock mutual funds. Furthermore. Although female equity owners tend to hold a similar number of equities in their portfolios.000 $85.000 4 61 years $53.000 $200. male equity owners have a median of $55.000 $200.000 5 78 years $30. 15 percent hold only individual stocks. Includes assets in employer-sponsored retirement plans but excludes value of primary residence. Equity investments include individual stock and stock mutual funds. Multiple responses included.000 invested in five equities.FIGURE 6 Summary of Characteristics of Equity Owners by Generation1 Baby Boom Generation (age 36 to 54) Silent Generation (age 55 to 74) GI Generation (age 75 or older) Generation X (age 19 to 35) Median Age Household income Household financial assets2 Household financial assets in equities Number of individual stocks and stock mutual funds owned 29 years $47.000 3 44 years $62. More female and co-decisionmaking equity owners than male equity owners hold stock mutual funds. Nevertheless. 75 percent closely follow the value of their investments. 47 percent hold only stock mutual funds. Ownership Patterns More equity owners own stock mutual funds than individual stocks. Co-decisionmaking equity owners have a median of $50. most equity investors are not passive.000 $20. The majority of equity owners seek investment advice from financial services professionals. more male equity owners than female or co-decisionmaking equity owners hold individual stocks.000 $74. Equity ownership characteristics differ by the gender of the household’s investment decisionmaker. Sixty-four percent say they rely on professional financial advisers when making equity purchase and sales decisions. Equity Ownership in America 7 .000 $50. the median value of their portfolios is typically smaller than that of co-decisionmaking or male equity owners. In addition.000 $25.000 invested in four equities.000 5 Percent Own: Individual stock (net)3 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)3 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans 1 2 3 45 21 35 83 64 45 52 23 43 88 67 57 58 17 51 84 47 62 63 6 59 80 12 72 Refers to the household’s responding financial decisionmaker for investments. Note: Number of respondents varies. and 38 percent own individual stocks and stock mutual funds (see Figure 4).500 $88.

Investors’ first equity purchase was usually a stock mutual fund. Equity Transactions14 The majority of equity owners did not buy or sell equities in 1998.999 $50. Fifty-nine percent of equity owners initially bought a stock mutual fund.000 to $49. an individual stock transaction excludes regular. and only a small number hold exceptionally high asset levels.230 The size of equity portfolios varies among U.FIGURE 7 Household Assets in Equities (percent of all equity owners) Less than $10.999 $500.000 2. Within this definition.000 to $99.000 to $499.000 $10.999 $1 million or more Mean Median Number of respondents 15 15 20 12 7 16 8 4 3 $167. Equity investors with holdings in employer-sponsored defined-contribution plans on average. 14 In this report.000 to $74. automatic payroll contributions to employer-sponsored retirement plans but includes employee allocation changes within these plans—either through payroll contribution changes or account balance changes—affecting stock mutual fund holdings. Also within this definition. households. companies is widespread. 31 percent purchased individual stock. Only 45 percent conducted equity transactions in 1998 (Figure 8). automatic payroll contributions to employer-sponsored retirement plans but includes employee allocation changes within these plans—either through payroll contribution changes or account balance changes—affecting individual stock holdings. More than 60 percent of stock mutual fund shareholders own international or global stock funds. Ownership of stock in non-U. an equity transaction excludes regular. a stock mutual fund transaction excludes regular. 8 Equity Ownership in America .999 $250. Of these.999 $25. and 15 percent of individual stock owners hold stock in foreign companies. An equity transaction also includes reinvestment of dividends and automatic payroll or savings account purchases of stock funds outside employer plans.S.000 to $999.100 $50.000 to $24. and 7 percent have equity assets of $500. For example. buyers outnumbered sellers three to two.999 $75. 50 percent of household owners have equity assets of less than $50. Equity owners with employer-sponsored retirement plans favor equity investments in those plans.000 or more (Figure 7). Many equity owners hold small-to-moderate amounts of equities. automatic payroll contributions to employer-sponsored retirement plans but includes employee allocation changes to a particular equity within these plans—either through payroll contribution changes or account balance changes. allocate 61 percent of plan assets to equity investments.000 to $249.999 $100. and 10 percent bought stock mutual funds and individual stock.S.000.

82 percent of individual stock sellers and 74 percent of stock mutual fund sellers outside employer plans reinvested at least some of the proceeds into other equity investments. More equity owners conducted transactions outside employer-sponsored retirement plans than inside such plans in 1998.989 1 Number of respondents = 895 See text footnote 14 on page 8 for the definition of an equity transaction. Internet transactors tend to be high-volume traders. compared with 17 percent inside retirement plans. in shares of other stock funds.FIGURE 8 Equity Transaction Activity in 19981 Conducted an Equity Transaction (percent of all equity owners) Types of Equity Transactions Conducted (percent of equity owners who made transactions) 58 Purchases and sales of equities No 55 45 Yes 6 Sales of equities 36 Purchases of equities Number of respondents = 1. Only 11 percent of investors conducting equity transactions executed trades over the Internet in 1998. Household equity purchases are often financed by accumulated savings. For example. compared with 35 percent of stock mutual fund shareholders who bought or sold stock mutual fund shares. compared with one individual stock transaction undertaken by those using conventional trading methods (Figure 9). Outside employer-sponsored retirement plans. Thirty-seven percent conducted equity transactions outside retirement plans. Equity Ownership in America 9 . Proceeds from the sale of equities outside employer plans are often reinvested in other equities. About half of equity owners purchasing equities outside employer-sponsored retirement plans in 1998 used accumulated savings to finance their most recent purchase. Use of the Internet to conduct equity transactions is still in its infancy. In 1998. stock fund sellers. 48 percent of individual stock owners bought or sold individual stocks in 1998. a median of 10 individual stock transactions were conducted by Internet transactors. Individual stock fund sellers typically reinvested in shares of other individual stock. More individual stock owners than stock mutual fund owners conducted transactions in 1998.

10 Equity Ownership in America .000 $127. Stock mutual fund shareholders usually own more than one stock mutual fund. Only 19 percent own one stock fund.000 is $20. The median stock assets for those under age 35 is $11. Thirty-four percent own two or three stock funds.000 while the median stock fund assets for those with incomes of $150.800 $229.000 or more is $150. Twenty-eight percent own stock in two or three companies. Individual Stock Owners Assets in individual stocks rise with age and household income. See text footnote 14 on page 8 for the definition of an equity transaction.900 while the median stock assets for those 65 or older is $62. Includes assets in employer-sponsored retirement plans but excludes value of primary residence. The median stock fund assets for those earning less than $50.000 $125. and 47 percent own stock in four or more companies.000 $70.000 1 1 93 33 93 85 67 63 64 22 59 88 57 69 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans 1 2 3 4 Refers to the household’s responding financial decisionmaker for investments. Individual stock investors usually own more than one stock. Stock Mutual Fund Shareholders Assets in stock mutual funds rise with age and household income.FIGURE 9 Summary of Characteristics of Equity Owners Who Made Transactions in 19981.500 (Figure 10).000 (Figure 11).600 10 2 48 years $65. Just 25 percent of individual stock owners hold stock in a single company. Multiple responses included. Note: Number of respondents varies.2 Conduct Equity Transactions over the Internet Median Age Household income Household financial assets3 Household financial assets in equities Number of individual stock transactions in 1998 Number of stock mutual fund transactions in 1998 Percent Own individual stock (net)4 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Own stock mutual funds (net) 4 Conduct Equity Transactions but not over the Internet 41 years $73. and 48 percent own four or more stock funds.

000 to $249.000 to to $99.300 $56.000 94 Equity Ownership in America 11 .000 to $99.999 $25.000 to $499.000 488 65 or Older 12 11 17 12 13 15 8 6 6 $296.900 $28.100 $62.999 $149.000 to $24.999 $500.600 $150.800 $181.FIGURE 10 Individual Stock Assets of Investors Owning Individual Stocks (percent of all individual stock owners) All Individual Stock Owners Less than $10.700 $40.000 766 65 or Older 8 13 26 16 12 14 9 1 2 $116.000 to $999.999 $149.100 156 $150.000 to $49.999 14 18 54 14 7 15 6 1 1 $82.000 1.800 $61.000 256 45 to 64 14 16 18 11 12 16 7 4 3 $179.000 $30.500 357 16 11 13 12 9 20 9 6 4 $229.000 29 27 20 9 4 7 2 1 1 $49.900 $50.000 $10.999 $500.000 to to $99.000 to $74.300 $11.000 37 22 15 6 5 9 4 3 1 $82.999 $75.400 $25.100 $30.000 470 45 to 64 9 14 21 16 8 20 8 4 1 $142.500 $20.999 $100.000 $10.000 or More 7 4 11 3 11 20 18 10 16 $546.000 $100.000 to $74.000 627 5 10 14 12 9 25 16 5 3 $247.999 $25.100 107 $150.999 $1 million or more Mean Median Number of respondents 15 18 24 14 7 14 5 2 1 $100.000 to $999.999 21 24 16 9 8 15 4 3 1 $87.935 Age Less than 35 30 25 27 9 4 5 1 1 0 $36.999 $1 million or more Mean Median Number of respondents 21 17 19 10 9 13 5 4 2 $152.000 to $99.000 1.200 $20.000 to $249.999 $250.999 $250.000 304 Less than $50.900 $94.000 to $499.000 or More 3 9 10 9 9 28 18 11 5 $298.500 238 Less than $50.999 $50.900 85 FIGURE 11 Stock Mutual Fund Assets of Investors Owning Stock Mutual Funds (percent of all stock mutual fund shareholders) All Stock Mutual Fund Shareholders Less than $10.300 $50.000 to $24.500 $12.000 394 35 to 44 16 22 26 14 5 12 3 1 1 $75.400 $38.999 $50.900 218 35 to 44 27 21 20 9 6 11 4 3 1 $70.200 Age Less than 35 39 21 20 8 4 6 1 1 1 $51.999 $100.000 513 Income $50.000 to $49.600 282 Income $50.000 $100.999 $75.

4 Percent of All U.600 households in 1999.2 32. vol.S.S. “Summary Descriptions of the 1983 Survey Results. households owned equities. households owned equities as of January 1999 (Figure 12).118.S. al. Equity Ownership in America 13 .2 31.S.. 19.S. Households Nearly Half of All U. or 48. 689.9 27.0 32.7 21.S.7 million from 42.8 35. 70 (September 1984) p.7 10.5 21.7 52.9 41.6 40. Only the 2.5 26. the number of individual owners rose to 78.15 In 1983. Household Ownership of Equities in 1999 Number of Individual Investors (millions) 78.2 Multiple responses included. Households Any type of equity (net)1 Any equity inside employer-sponsored retirement plans Any equity outside employer-sponsored retirement plans Individual stock (net)1 Individual stock inside employer-sponsored retirement plans Individual stock outside employer-sponsored retirement plans Stock mutual funds (net)1 Stock mutual funds inside employer-sponsored retirement plans Stock mutual funds outside employer-sponsored retirement plans 1 Number of Households (millions) 49. Households Own Equities An estimated 49.842 households were interviewed to collect this information. according to the U. P25-1129.0 percent of U.17 FIGURE 12 U.336 who qualified as equity owners participated in the in-depth survey. of U. a gain of 85.3 26. Avery. Current Population Reports.8 66.S.9 44. The 1983 data is from Shareownership 1985 (New York Stock Exchange) and the 1999 data is from this report.4 40. Bureau of the Census. Note: A total of 4.1 10. had approximately 102. et.6 percent.0 14.8 48.S.CHAPTER 1 Overview of Equity Owners Ownership of Equities by U.0 61.5 36. 15 16 17 The U.2 percent.9 27. Robert B.2 million.16 Over the same period.4 million.” Federal Reserve Bulletin.8 28.5 27.8 39.

households — representing 66. more individual stock owners bought their first equity before 1990. respectively. Individual Stock Investors and Stock Mutual Fund Shareholders Differ Individual stock owners differ in several ways from stock mutual fund shareholders. and more own investment real estate than do stock mutual fund shareholders. usually married couples.S. and females make the decisions 20 percent of the time. with household income of $60. Equity owners are typically seasoned investors.18 Males make the decisions in 26 percent of these households.8 million held stock mutual funds outside retirement plans. investment real estate. make the investment decisions in 54 percent of equity-owning households. Characteristics of Equity Owners Equity Owners Tend to Be Middle-aged. Referred to as male equity owners and female equity owners.More U. their median assets are $125. individual bonds or bond mutual funds. Slightly more than half own IRAs. About one-fifth are retired from their lifetime occupations. In contrast.7 million U. and 27. Besides owning equities. employed.000 and household financial assets of $85. 26 percent.S.S. and college graduates.19 Female equity owners have a median age of 50. 26.8 million U. Fifty-four percent first purchased equities before 1990. 39 percent of equity owners hold hybrid mutual funds. Equity Ownership Characteristics Differ by the Gender of the Household’s Investment Decisionmaker Co-decisionmakers. 28 percent. Investors Own Stock Mutual Funds than Individual Stock An estimated 41. Nearly 11 million households owned individual stock through employer-sponsored retirement plans.8 million individuals and 85 percent of all equity investors — owned stock mutual funds in January 1999.000 (Figure 13). whereas male and co-decisionmaking equity owners tend to be in their mid-forties (see Figure 58 in Appendix C). and 22 percent. between 1990 and 1995. and 21.9 million households held individual stock outside these plans. Seasoned Investors with Moderate Income and Assets The median equity owner is 47 years old. The median 18 19 Referred to as co-decisionmaking equity owners. Individual stock owners tend to have greater household financial assets than stock mutual fund shareholders. The first purchase typically occurred outside an employer-sponsored retirement plan. after 1995. More than 28 million of those households held stock mutual funds through employer-sponsored retirement plans. Fourfifths have employer-sponsored retirement plans. households — representing 40 million individuals and 54 percent of all equity owners — held individual stock in January 1999.500 for stock mutual fund shareholders. usually 401(k) plans. 14 Equity Ownership in America . and the remaining 18 percent. more have college degrees. Most equity owners are married.000 versus $87. usually through a stock mutual fund. In addition.

000 26 20 54 67 53 80 21 54 20 44 85 58 57 54 28 18 44 56 31 59 10 83 22 9 16 21 39 26 26 80 53 90 5 2 5 2 29 17 54 69 58 77 24 100 37 83 72 49 55 67 22 11 32 68 59 22 19 84 24 12 17 23 38 30 32 79 57 91 3 2 3 3 25 20 55 68 53 81 20 43 16 39 100 69 67 54 29 17 46 54 18 70 12 83 24 9 19 22 44 29 27 82 56 90 5 1 3 2 Refers to the household's responding financial decisionmaker for investments.500 $125. or certificates of deposit Bond investments (net)3 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage Have IRA Ethnic background:4 Caucasian African-American Asian Hispanic Other 1 2 47 years $60. Note: Number of respondents varies. Includes assets in employer-sponsored retirement plans but excludes value of primary residence.000 $87. individual stock owners. 3 Multiple responses included. 4 Multiple responses included because Hispanics can be of any race. Equity Ownership in America 15 . money market deposit accounts. Refer to Appendix B for more details on the demographic and financial characteristics of all equity owners. and mutual fund shareholders.000 47 years $60.000 $85.FIGURE 13 Characteristics of Equity Owners1 Type of Equity Owned Stock Individual Mutual Stock Funds 48 years $62.500 All Equity Owners Median Age Household income Household financial assets2 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married College or postgraduate degree Employed Retired from lifetime occupation Equity investments owned: Individual stock (net)3 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)3 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Bought first equity: Before 1990 1990 to 1995 1996 or later Source of first equity purchase: Inside employer-sponsored retirement plan Outside employer-sponsored retirement plan Type of equity first purchased: Individual stock only Stock mutual fund only Both individual stock and stock mutual funds Non-equity investments owned:3 Savings accounts.

household income of female equity owners is $36. and fewer male equity owners hold stock mutual funds. the percentage of owners with individual stock assets of $500.000 invested in equities. the mean amounts are very different primarily because more individual stock owners have high levels of assets in individual stock than do those who own stock mutual funds.000 for co-decisionmaking equity owners (see Figure 59 in Appendix C).000.000 for those under age 35.000 or more. and only about 10 percent have equity assets of $100.000 invested in equities. compared with $24. The median assets in equities for equity investors age 65 or older is $81. 19 percent of equity owners age 65 or older have less than $10.000 or more is double that of owners of stock mutual fund assets. households.000. In contrast.000 for male equity owners and $50.000.000 or more.000 and $62. The large difference between the median and the mean points to a skewed distribution of equity assets: a large number of equity owners hold small-to-moderate amounts while a small number hold exceptionally high levels of equity assets. Household assets in equities tend to increase with age.000 — considerably lower than the median household incomes of male and co-decisionmaking equity owners.000. Characteristics of Equity Investing Household Equity Portfolios Tend to Be Moderately Sized But Diverse The size of equity portfolios varies widely among U.000. In contrast. More male equity owners than female or co-decisionmaking equity owners hold individual stock. The median amount held in equities is $50. Equity Ownership. which are $55. while ownership outside these plans increases with age. The median equity portfolio of female equity investors is $35. 30 percent have less than $25. except that the median assets of male equity owners is higher than that of co-decisionmaking equity owners.S. Male equity owners conducted a median of one transaction.000 or more. The median amount held in stock mutual funds versus individual stocks is fairly similar — $38. and tend to allocate a greater portion of their financial portfolios to equities than do older owners (see Figures 64 and 65 in Appendix C). 16 Equity Ownership in America . For example. the mean is $152. Twenty-one percent have less than $10.000.7 million households owning individual stocks.100 (Figure 14). the mean amount is $167. Median individual stock holdings are $30. respectively. The value of individual stock portfolios varies considerably among the 26.000 invested in equities. Compared with the other two groups. Co-decisionmaking equity owners are the most likely to have employer-sponsored retirement plan coverage. Male equity owners typically have a higher tolerance for investment risk than either female or co-decisionmaking equity owners. Younger equity owners are more willing to take investment risk. However. For example. Risk Tolerance Vary by Age Ownership of equities inside employer-sponsored retirement plans decreases with age. and 44 percent have $100.000 or more. more female equity owners are widowed and retired.000 compared with $30. Household financial assets follow a similar pattern. 7 percent of household owners have equity assets of $500.000 invested in individual stocks while 24 percent hold individual stocks valued at $100. Most female and co-decisionmaking equity owners did not conduct equity transactions in 1998. compared with $55. Half of equity owners under age 35 have less than $25.500.

000 to $49.000 to $999.999 $25.230 Equity Ownership in America 17 .000 1.999 $1 million or more Mean Median Number of respondents Stock Mutual Fund Assets of Investors Owning Stock Mutual Funds (percent of all stock mutual fund shareholders) Less than $10. and Stock Mutual Funds Equity Assets of Investors Owning Equities (percent of all equity owners) Less than $10.999 $100.999 $100.000 to $249.999 $1 million or more Mean Median Number of respondents Individual Stock Assets of Investors Owning Individual Stocks (percent of all individual stock owners) Less than $10.000 to $74.000 to $49.000 to $499.999 $25.000 to $99.000 to $999.000 to $49.000 to $249.400 $38.000 2.999 $250.000 to $999.999 $250.200 15 15 20 12 7 16 8 4 3 $167. Individual Stock.999 $50.999 $250.999 $75.000 to $99.000 to $24.999 $1 million or more Mean Median Number of respondents 15 18 24 14 7 14 5 2 1 $100.999 $50.999 $75.000 1.000 to $499.100 $50.000 to $74.000 $10.999 $75.999 $500.000 to $24.999 $50.935 21 17 19 10 9 13 5 4 2 $152.000 to $99.000 $10.000 $30.000 to $74.FIGURE 14 Assets in All Equities.000 to $499.999 $100.999 $500.000 to $24.999 $25.000 to $249.999 $500.000 $10.

and Stock Mutual Funds Owned Total Number of Equities Owned by Investors Owning Equities (percent of all equity owners) One Two Three Four to six Seven or more Mean Median Number of respondents Number of Individual Stocks Owned by Investors Owning Individual Stock (percent of all individual stock owners) One Two Three Four to six Seven or more Mean Median Number of respondents Number of Stock Mutual Funds Owned by Investors Owning Stock Mutual Funds (percent of all stock mutual fund shareholders) One Two Three Four to six Seven or more Mean Median Number of respondents 19 19 15 26 22 5 3 1. The median number of equities held is four. Individual Stock.FIGURE 15 Number of All Equities.593 25 16 12 20 27 7 3 1.835 Over Three-quarters Hold Two or More Equities Most equity owners own more than one equity security (Figure 15).20 Only 17 percent own one. Just 25 percent hold stock in a single company. Individual stock owners hold a median of three individual stocks and a mean of seven. and the mean is seven. 49 percent have two to six. and 34 percent hold seven or more. 18 Equity Ownership in America . The typical individual stock investor owns more than one individual stock. and 47 percent own stock in four or more companies. 20 Each stock mutual fund is counted as an equity holding.074 17 15 12 22 34 7 4 1. Twenty-eight percent own stock in two or three companies.

FIGURE 16

Ownership of Individual Stock in Foreign Companies and International or Global Mutual Funds
Own Individual Stock in Foreign Companies or International or Global Mutual Funds (percent of all equity owners) Yes No Own Individual Stock in Foreign Companies (percent of all individual stock owners) Yes No Own International or Global Mutual Funds (percent of all stock mutual fund shareholders) Yes No
Note: Number of respondents varies.

55 45

15 85

62 38

Similarly, stock mutual fund shareholders tend to own more than one stock mutual fund. Twenty-two percent own at least seven different stock mutual funds. Stock fund investors hold a median of three stock mutual funds and a mean of five.
Ownership of International Equities Is Largely Through Mutual Funds

Ownership of non-U.S. equities is more prevalent among stock mutual fund investors than individual stock investors. More than three-fifths of stock mutual fund shareholders own international or global stock mutual funds (Figure 16). In contrast, just 15 percent of individual stock holders own stock in foreign companies.

Views on Equity Investing
Equity Owners Are Long-term Investors Saving for Retirement

Equity owners tend to adopt a long-range investment outlook (Figure 17). Ninety-six percent view their equity holdings as long-term investments, and 87 percent say they follow a buy-and-hold investment philosophy. In response to a separate question, however, 19 percent say they like to cash out their investments to make short-term profits. Two-thirds list saving for retirement as a primary financial goal. Eighty-three percent are not concerned with short-term fluctuations in their equity investments.
Equity Investors Say They Can Tolerate Investment Risk

Equity owners tolerate investment risk to some degree. Nine percent are willing to take substantial risk for substantial gain, and 31 percent are willing to take above-average risk for above-average gain. The largest portion of equity owners, 48 percent, are willing to take average risk for average gain. The remaining 13 percent prefer to take below-average or no risk. Sixty-four percent rely on professional financial advisers when purchasing and selling equities. Nevertheless, 75 percent closely follow the value of their investments. The majority indicate they have at least a basic understanding of investing in individual stocks and stock mutual funds. Equity Ownership in America 19

FIGURE 17

Views on Equity Investing
(percent)
Type of Equity Owned All Equity Owners Strongly or somewhat agree:1 I view my equity investments as savings for the long term I tend to follow a buy-and-hold investment strategy I am not concerned about short-term fluctuations in my equity investments I closely follow the value of my equity investments I tend to rely on advice from a professional financial adviser when making equity purchase and sales decisions I like to cash out my investments if I make a short-term profit Willingness to take financial risk with equity investments: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk Primary financial goal for equity investments: Retirement Education Current income Emergency Home purchase Other Self-assessed understanding of individual stock: Comprehensive Basic Limited None Self-assessed understanding of stock mutual funds: Comprehensive Basic Limited None
1

Individual Stock

Stock Mutual Funds

96 87 83 75

95 88 83 77

97 88 84 75

64 19

59 20

66 19

9 31 48 7 6

9 32 46 6 4

9 32 48 6 5

66 11 6 5 4 8

65 11 7 4 4 9

68 11 5 5 4 7

18 54 26 2

25 55 19 2

17 54 26 2

17 53 27 4

19 50 26 5

18 55 25 2

Multiple responses included.

Note: Number of responses varies.

20

Equity Ownership in America

FIGURE 18

Transactions in 19981
Number of Equity Transactions in 1998 (percent of all equity owners) None 1 to 2 3 to 5 6 to 12 More than 12 Mean Median Number of respondents Number of Individual Stock Transactions in 1998 (percent of all individual stock owners) None 1 to 2 3 to 5 6 to 12 More than 12 Mean Median Number of respondents Number of Stock Mutual Fund Transactions in 1998 (percent of all stock mutual fund shareholders) None 1 to 2 3 to 5 6 to 12 More than 12 Mean Median Number of respondents
1

55 15 10 9 11 5 0 1,989

52 15 14 10 9 6 0 1,104

65 16 8 7 4 2 0 1,767

See text footnote 14 on page 8 for the definition of an equity transaction.

Equity Transaction Activity in 199821
Few Investors Conducted Equity Transactions in 1998

More than half of equity owners did not conduct an equity transaction in 1998. Twentyfive percent conducted one to five transactions; 9 percent, six to 12 transactions; and 11 percent, more than 12 transactions (Figure 18). Because a small number of equity owners conducted many transactions, the average number of transactions in 1998 is five while the median is zero.
21

See text footnote 14 on page 8 for the definition of an equity transaction.

Equity Ownership in America

21

Purchasers outnumbered sellers in 1998: 46 percent bought individual stock and 33 percent sold individual stock. (See Figure 35 on page 40. Most purchased shares in other individual stocks. Multiple responses included. The majority of owners purchasing individual stock outside an employer-sponsored retirement plan in 1998 used accumulated savings to finance their most recent purchase.3 Bought individual stock inside an employer-sponsored retirement plan Sold individual stock inside an employer-sponsored retirement plan Conducted an individual stock transaction outside an employer-sponsored retirement plan (net)2 Bought individual stock outside an employer-sponsored retirement plan Sold individual stock outside an employer-sponsored retirement plan 1 2 3 48 46 33 12 10 6 44 39 28 See text footnote 14 on page 8 for the definition of an individual stock transaction. more individual stock owners than stock mutual fund owners conducted six or more individual stock transactions. Note: Number of respondents varies. SEP-IRAs. Consequently. the mean number of individual stock transactions in 1998 is significantly higher than the mean number of stock mutual fund transactions (six for the former. federal. However. Employer-sponsored retirement plans include 401(k) plans. SAR-SEPs. Purchases Outnumber Sales Forty-eight percent of individual stock investors bought or sold individual stock in 1998 (Figure 19). (See Figure 34 on page 39. compared with 12 percent who transacted within such plans. two for the latter). or local government plans.FIGURE 19 Types of Individual Stock Transactions Conducted by Individual Stock Owners in 19981 (percent of all individual stock owners) Conducted an individual stock transaction (net)2 Bought individual stock Sold individual stock Conducted an individual stock transaction inside an employer-sponsored retirement plan (net)2. state. and SIMPLE IRAs.) More than four-fifths of those who sold individual stock outside employer-sponsored retirement plans in 1998 reinvested at least part of the proceeds they received.) 22 Equity Ownership in America . Most of the owners of both types of equities — 52 percent of individual stock investors and 65 percent of stock mutual fund investors — did not conduct transactions. Most Individual Stock Transactions Occur Outside Employer Plans. The transactions primarily occurred outside employer-sponsored retirement plans: 44 percent bought or sold outside employer-sponsored retirement plans. 403(b) plans. Similar patterns emerge when considering transaction activity separately for individual stocks and stock mutual funds. Other frequently mentioned sources of funds were reinvested dividends and proceeds from the sale of shares of other individual stock.

and SIMPLE IRAs.) Equity Owners by Level of Transaction Activity in 199822 About One in Ten Equity Owners Were High-volume Buyers or Sellers in 1998 Eleven percent of all equity owners conducted a high volume (more than 12) of equity transactions in 1998 .FIGURE 20 Types of Stock Mutual Fund Transactions Conducted by Stock Mutual Fund Shareholders in 19981 (percent of all stock mutual fund shareholders) Conducted a stock mutual fund transaction (net)2 Bought stock mutual funds Sold stock mutual funds Conducted stock mutual fund transaction inside an employer-sponsored retirement plan (net)2. or local government plans. (See Figure 43 on page 47. Multiple responses included. More than one-quarter conducted an equity transaction over the Internet in 1998. Forty-eight percent of stock mutual fund shareholders who bought stock mutual fund shares outside employer-sponsored retirement plans in 1998 cited accumulated savings as the source of money for the most recent purchase. 403(b) plans. they typically bought shares in five stock funds and sold shares in one. compared with 18 percent who made transactions inside such plans. Of the group reinvesting proceeds. Eighty percent bought or sold individual stock in 1998. Note: Number of respondents varies. and 17 percent reinvested some but not all of the proceeds. These high-volume buyers or sellers typically bought eight individual stocks in 1998 and sold four. with purchasers outnumbering sellers three to two. Forty-eight percent also mentioned reinvested dividends. Equity Ownership in America 23 . three-quarters purchased shares of other stock mutual funds. Employer-sponsored retirement plans include 401(k) plans. while only 12 percent mentioned sales proceeds from other stock mutual funds. SAR-SEPs. 22 See text footnote 14 on page 8 for the definition of an equity transaction.3 Bought stock mutual fund inside an employer-sponsored retirement plan Sold stock mutual fund inside an employer-sponsored retirement plan Conducted stock mutual fund transaction outside an employer-sponsored retirement plan (net)2 Bought stock mutual fund outside an employer-sponsored retirement plan Sold stock mutual fund outside an employer-sponsored retirement plan 1 2 3 35 34 18 18 16 8 25 21 11 See text footnote 14 on page 8 for the definition of a stock mutual fund transaction. Ninety-nine percent of high-volume buyers or sellers bought equities in 1998. SEP-IRAs. federal. Stock Mutual Fund Owners Transact Similarly to Individual Stock Owners Thirty-five percent of stock mutual fund shareholders bought or sold stock fund shares in 1998 (Figure 20). 57 percent reinvested all of the proceeds from their most recent sale. and 87 percent sold equities (Figure 21). and 75 percent bought or sold stock mutual funds.) Of those who sold mutual fund shares outside employer-sponsored retirement plans in 1998. state. (See Figure 44 on page 47. One-quarter bought or sold stock fund shares outside retirement plans in 1998.

Equity Owners by Purchase of Equities in 199823 Six in Ten Equity Owners Did Not Purchase Equities in 1998 Sixty percent of equity owners did not purchase an equity in 1998. The majority are college graduates. 23 See text footnote 14 on page 8 for the definition of an equity transaction. Nearly 90 percent own stock mutual funds. This group has more assets invested in equities than any other group. They have a median age of 46. Eightyfive percent own individual stock and 88 percent hold stock mutual funds. married. and employed (Figure 22).. Eighty-two percent own stock mutual funds and 42 percent own individual stock. and more than 60 percent hold individual stocks.500 and median household financial assets are $280. and were more likely to buy or sell stock funds than individual stocks (Figure 21). About One-third of Equity Owners Conducted Between One and Twelve Transactions in 1998 Individuals conducting between one and 12 transactions in 1998 represent 34 percent of equity owners. either (Figure 24). with median household income of $50.000 and household financial assets of $65. This group is slightly younger and has lower household income and assets than those who made equity transactions during the year (Figure 22). than other transaction groups. and thirty percent bought between 1990 and 1995. married and employed. Most are married and employed. They typically purchased their first equity earlier. More Than Half of Equity Owners Conducted No Transactions in 1998 Fifty-five percent of equity owners did not conduct any equity transactions in 1998.000. This group was evenly split between buying their first equity through an employer plan or outside such a plan.Those who buy or sell equities in high volume tend to be in their late forties.000. with more income and assets than other equity owners (Figure 22). More high-volume traders closely follow the value of their investments. and closely follow the value of their investments. and are the most willing to assume higher levels of financial risk. Typically. More members of this group say they consult professional financial advisers when making investment decisions and fewer closely monitor the value of their portfolios than those who bought or sold equities. and tend to have greater incomes and household financial assets than those not making transactions. 24 Equity Ownership in America . Low-to-moderate volume buyers or sellers tend to be in their late forties. They bought more often than they sold equities. and 45 percent are college graduates. The majority rely on professional financial advisers when making investment decisions. usually outside an employer-sponsored retirement plan. Their median household income is $87. nearly half of the household assets of those in the 1-to-12-transactions group are invested in equities. Members of this group are also the most inclined to find investing in individual stocks or stock mutual funds complicated. More of these individuals purchased their first equity outside an employer-sponsored retirement plan than did other transaction groups. and say they do not rely on professional financial advisers. Only 6 percent conducted an equity transaction on the Internet in 1998. Most purchased their first equity before 1990. Nearly one-quarter purchased their first equity after 1995. Most members of this group did not engage in equity sales.

More own equities outside employer plans than inside such plans. allocated to two individual stocks and four stock mutual funds. Most are willing to take average financial risk.FIGURE 21 Transaction Activity in 1998 by Number of Equity Transactions1 Made 1 to 12 Transactions in 1998 Median Number of individual stock transactions Number of individual stock buys Number of individual stock sells Number of stock mutual fund transactions Number of stock mutual fund buys Number of stock mutual fund sells Percent Equity transactions executed in 1998:2 Purchase of equities Sale of equities Purchase or sale of individual stock Purchase or sale of stock mutual funds Conducted an equity transaction over the Internet in 1998 1 2 Made More Than 12 Transactions in 1998 1 0 0 1 1 0 13 8 4 9 5 1 87 50 52 63 6 99 87 80 75 28 See text footnote 14 on page 8 for the definition of an equity transaction. About one in ten conducted equity transactions over the Internet in 1998. About one-fifth are retired. and own IRAs. More than half purchased their first equity in 1990 or later. typically allocated to three equities.000. More equity purchasers than nonpurchasers are married. Compared with investors who purchased equities in 1998. and median household income is $65. Median assets in equities are $30. more of those who did not buy equities found investing in individual stock or stock mutual funds to be complicated. Four in Ten Equity Owners Bought Equities in 1998 Investors who purchased equities in 1998 represent 40 percent of all equity owners. Less than half have an IRA.000 and household financial assets are $125. or 65 percent of household financial assets.000. The median age of equity purchasers is 48. and less than half have earned a four-year college degree. Investors who bought equities in 1998 typically have $81. Equity Ownership in America 25 .000. Investors who purchased equities in 1998 tend to be older and more affluent than those who did not buy equities during the year (Figure 24). Multiple responses included. college-educated. About three-fifths are married. This group conducted a median of two individual stock transactions and two stock mutual fund transactions in 1998 (Figure 23). Eighty-two percent of this group own stock mutual funds and 42 percent own individual stock.

500 $118.500 $280.000 $30. Includes assets in employer-sponsored retirement plans but excludes value of primary residence.FIGURE 22 Characteristics of Equity Owners by Number of Equity Transactions1. See text footnote 14 on page 8 for the definition of an equity transaction.500 $56.000 6 1 3 47 years $87.000 3 0 2 47 years $62.500 13 6 6 63 45 79 21 42 16 32 82 54 47 48 30 23 50 50 28 66 8 8 24 52 7 9 78 46 70 60 82 19 62 21 56 88 61 66 59 26 15 38 62 32 56 12 8 37 47 4 4 82 58 76 78 84 18 85 34 83 88 58 81 65 25 9 23 77 44 41 15 14 52 31 3 0 78 70 Refers to the household’s responding financial decisionmaker for investments.000 $65. 26 Equity Ownership in America .000 $167.2 Made 1 to 12 Transactions in 1998 34 Made More Than 12 Transactions in 1998 11 Made No Transactions in 1998 Percent of all equity owners Median Age Household income Household financial assets3 Household financial assets in equities Number of equities owned Number of individual stocks owned Number of stock mutual funds owned Percent Married College or postgraduate degree Employed Retired from lifetime occupation Equity investments owned: Individual stock (net)4 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)4 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Bought first equity: Before 1990 1990 to 1995 1996 or later Source of first equity purchase: Inside employer-sponsored retirement plan Outside employer-sponsored retirement plan Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk Have employer-sponsored retirement plan coverage Have IRA 1 2 3 4 55 45 years $50. Multiple responses included.

FIGURE 23 Transaction Activity in 1998 by Equity Purchasers1 Type of Equity Purchased* Stock Individual Mutual Stock Funds All Equity Purchasers Median Number of individual stock transactions Number of individual stock buys Number of individual stock sells Number of stock mutual fund transactions Number of stock mutual fund buys Number of stock mutual fund sells Percent Equity transactions executed in 1998:2 Purchase of equities Sale of equities Purchase or sale of individual stock Purchase or sale of stock mutual funds Conducted an equity transaction over the Internet in 1998 1 2 All Equity Nonpurchasers 2 1 0 2 1 0 5 3 1 0 0 0 0 0 0 3 2 0 0 0 0 0 0 0 100 59 63 71 12 100 69 100 46 19 100 52 43 100 10 0 5 3 3 0 See text footnote 14 on page 8 for the definition of an equity transaction. They typically have $111. They typically have more income and assets than those who purchased stock mutual funds.000 invested in six individual stocks and four stock mutual funds. The majority of investors who bought individual stock in 1998 purchased their initial equity before 1990. and employed (Figure 24). The median household income of individual stock purchasers is $72. They conducted a median of five individual stock transactions.000. * Ten percent of equity owners who purchased equities in 1998 bought both individual stock and stock mutual funds. Investors who bought individual stock in 1998 tend to be in their late forties. More than half will accept above-average or substantial financial risk. More equity purchasers than nonpurchasers own individual stock. Multiple responses included.000. Equity holdings typically account for 63 percent of this group’s household financial assets. Nearly one-fifth used the Internet in 1998 to conduct an equity transaction. most of which were purchases rather than sales (Figure 23). married. and median household financial assets are $176. usually an individual stock. Two-thirds hold college degrees. More than One-quarter of Equity Owners Purchased Individual Stock in 1998 Twenty-seven percent of equity owners purchased individual stock in 1998. The majority of equity purchasers bought their first equity before 1990. but similar percentages own stock mutual funds. Four-fifths own stock funds. Two-thirds of this group’s initial purchases were conducted outside employer plans. Equity Ownership in America 27 .

28 Equity Ownership in America .000 $176.000 7 1 5 46 years $50.000 8 2 4 48 years $72.000 11 6 4 46 years $65.500 $75.000 3 0 2 72 64 83 18 69 25 63 89 63 69 62 25 13 36 64 35 51 13 11 40 43 4 2 83 60 74 66 81 22 100 39 93 80 58 63 68 21 10 33 67 54 26 19 12 39 43 3 3 80 63 72 65 87 13 53 22 48 100 73 79 60 27 13 41 59 19 67 14 11 43 41 4 2 86 62 62 45 79 21 42 16 32 82 55 47 48 30 22 50 50 27 65 8 8 25 51 8 8 79 47 Refers to the household’s responding financial decisionmaker for investments.000 $81.000 $30.000 $65.000 $125. Multiple responses included.000 $114. Includes assets in employer-sponsored retirement plans but excludes value of primary residence.FIGURE 24 Characteristics of Equity Owners Who Purchased Equities in 19981 Type of Equity Purchased* Stock Individual Mutual Stock Funds 27 23 All Equity Purchasers Percent of all equity owners Median Age Household income Household financial assets2 Household financial assets in equities Number of equities owned Number of individual stocks owned Number of stock mutual funds owned Percent Married College or postgraduate degree Employed Retired from lifetime occupation Equity investments owned: Individual stock (net)3 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)3 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Bought first equity: Before 1990 1990 to 1995 1996 or later Source of first equity purchase: Inside employer-sponsored retirement plan Outside employer-sponsored retirement plan Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk Have employer-sponsored retirement plan coverage Have IRA 1 2 3 All Equity Nonpurchasers 60 40 48 years $65.000 $111. * Ten percent of equity owners who purchased equities in 1998 bought both individual stock and stock mutual funds.

compared with two in ten individual stock fund purchasers. fairly evenly split between stock sales and purchases. In contrast. median household income of $73. Nearly all purchased their first equity. and about two-fifths own individual stock inside these plans. Most Internet equity transactors whose most recent transaction was a sale outside an employer plan reinvested the proceeds from the sale. Equity Ownership in America 29 . Altogether. and median household financial assets of $229.000. This group’s financial holdings are about one-third smaller than those of investors who bought individual stock. the median number of stock mutual fund transactions conducted by this group was four.Less than One-quarter of Equity Owners Purchased Shares of Stock Mutual Funds in 1998 Twenty-three percent of equity owners purchased shares in stock mutual funds in 1998. usually a stock mutual fund. The median age of those who purchased stock mutual fund shares is 46 — two years younger than that of individual stock purchasers (Figure 24). 99 percent bought equities in 1998. not stock mutual funds. Nearly all high-volume equity sellers own individual stock outside employer plans. Stock fund purchasers have a median income of $65. Four-fifths own stock mutual funds.000. Investors who used the Internet for an equity transaction conducted a median of ten individual stock transactions and two stock mutual funds transactions in 1998. Internet transactors have a median age of 41.600 invested in equities.800. Their transaction activity in 1998 primarily involved individual stock. and nearly 90 percent are employed. This group undertook a median of 43 individual stock transactions. and 88 percent sold equities. respectively).900. Equity Owners by Internet Purchase or Sale of Equities in 1998 Internet Transactions by Equity Owners Were Infrequent in 1998 Only 11 percent of equity buyers or sellers (or 5 percent of all equity owners) used the Internet to conduct equity transactions in 1998 (Figure 26). These equity investors typically own 15 individual stocks and five stock mutual funds. About one in 10 stock fund purchasers conducted equity transactions over the Internet in 1998. Stock fund purchasers typically conducted fewer transactions than individual stock fund purchasers in 1998 (Figure 23). More are college-educated than conventional equity buyers or sellers. The typical Internet transactor has $127. outside an employer plan. Sixty percent of investors who purchased stock mutual fund shares bought their initial equity before 1990. usually an individual stock. with median household financial assets of $402. Stock fund purchasers also tend to own fewer equities than those who bought individual stocks (a median of seven and 11.700 and equity assets of $270. and owns seven individual stocks and five stock mutual funds. Most high-volume equity sellers are experienced investors: more than three-fifths purchased their first equity before 1990. Investors who use the Internet to buy or sell equities tend to be younger and more affluent than conventional equity buyers or sellers. Equity Owners Who Sold 12 or More Equities in 1998 Equity owners who sold more than 12 equities in 1998 represent 3 percent of all equity owners (Figure 25). They tend to be affluent.

See text footnote 14 on page 8 for the definition of an equity transaction. 30 Equity Ownership in America .4 Purchase of equities Sale of equities Purchase or sale of individual stock Purchase or sale of stock mutual funds Conducted an equity transaction over the Internet in 1998 Equity investments owned: Individual stock (net)3 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net) 3 3 50 years $100.000 $402.900 21 15 5 43 20 20 4 1 0 98 100 93 56 49 97 39 96 80 44 73 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Bought first equity: Before 1990 1990 to 1995 1996 or later Source of first equity purchase: Inside employer-sponsored retirement plan Outside employer-sponsored retirement plan Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds 1 2 3 4 62 24 14 7 93 61 22 17 Refers to the household’s responding financial decisionmaker for investments.700 $270.FIGURE 25 Characteristics of Equity Owners Who Conducted 12 or More Equity Sales in 19981 Percent of all equity owners Median Age Household income Household financial assets2 Household financial assets in equities Number of equities owned Number of individual stocks owned Number of stock mutual funds owned Number of individual stock transactions Number of individual stock buys Number of individual stock sells Number of stock mutual fund transactions Number of stock mutual fund buys Number of stock mutual fund sells Percent Equity transactions executed in 1998:3. Multiple responses included. Includes assets in employer-sponsored retirement plans but excludes value of primary residence.

slightly more say they adhere to a buy-and-hold investment philosophy (90 percent. and 57 percent sold equities. and in response to a separate question. compared with 36 percent). and tend to have smaller equity portfolios than Internet transactors.The majority of investors who use the Internet for equity transactions say they do not rely on professional financial advisers when making investment decisions. In response to a separate question. compared with 83 percent). The typical non-Internet transactor has $70. Most of these conventional transactors rely on professional financial advisers when making investment decisions. They are more often retired. however. with household income of $65. 36 percent say they prefer cashing out investments to make a short-term profit.000. Most of those whose most recent transaction was a sale reinvested the proceeds.000 and household financial assets of $125. Sold Equities in 1998 Did Not Use the Internet Eighty-nine percent of those who conducted an equity transaction (or 40 percent of equity owners) in 1998 conducted transactions through methods other than the Internet (Figure 26). conducting a median of one stock transaction and one stock mutual fund transaction. More than 90 percent bought equities in 1998. More than three-quarters are willing to take above-average or substantial risk with their equity investments. The typical non-Internet transactor is 48 years old. Ninety-three percent of conventional transactors are willing to take at least average risk with their equity investments. Equity Ownership in America 31 . Eighty-three percent employ a buy-and-hold investment philosophy. Nine in Ten Who Bought. Fewer conventional than Internet transactors say they like to take short-term profits (19 percent. They bought or sold less frequently than Internet transactors.000 invested in two individual stocks and four mutual funds.

000 $70. 32 Equity Ownership in America .FIGURE 26 Characteristics of Equity Owners by Use of the Internet to Conduct Equity Transactions in 19981. See text footnote 14 on page 8 for the definition of an equity transaction.000 7 2 4 1 0 0 1 1 0 75 80 88 11 93 33 93 85 67 63 57 27 16 25 75 37 44 18 25 51 22 2 0 82 71 70 61 81 20 64 22 59 88 57 69 60 26 14 35 65 35 52 13 8 40 45 4 3 80 59 Refers to the household’s responding financial decisionmaker for investments.000 $127.2 Conduct Equity Transactions over the Internet Percent of all equity transactors Median Age Household income Household financial assets3 Household financial assets in equities Number of equities owned Number of individual stocks owned Number of stock mutual funds owned Number of individual stock transactions in 1998 Number of individual stock buys Number of individual stock sells Number of stock mutual fund transactions in 1998 Number of stock mutual fund buys Number of stock mutual fund sells Percent Married College or postgraduate degree Employed Retired from lifetime occupation Equity investments owned: Individual stock (net)4 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)4 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first equity purchase: Before 1990 1990 to 1995 1996 or later Source of first equity purchase: Inside employer-sponsored retirement plan Outside employer-sponsored retirement plan Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk Have employer-sponsored retirement plan coverage Have IRA 1 2 3 4 Conduct Equity Transactions but not over the Internet 89 11 41 years $73. Note: Number of respondents varies.600 13 7 5 10 6 4 2 1 0 48 years $65. Multiple responses included.800 $229.000 $125. Includes assets in employer-sponsored retirement plans but excludes value of primary residence.

Slightly more than three-quarters are covered by employer-sponsored retirement plans and three-fifths own IRAs. The financial decisionmakers in these households have a median age of 49.500 and median household financial assets of $140. Most are experienced equity investors: 70 percent made their first equity investment before 1990. with median household income of $62. and 32. investment real estate. Forty-four percent own one or two individual stocks outside employer plans. Between 30 percent and 40 percent own money market funds.S. or 21. and 19 percent own 10 or more. Nearly four-fifths made their initial equity purchase outside an employer plan. Few invest in bonds — 18 percent own bond mutual funds and 13 percent have individual bonds. Individual Stock Portfolios Outside Employer Plans Are Typically Small Owners of individual stock outside employer plans hold a median of $26.000 in individual stock. The majority are not concerned by short-term market fluctuations or interested in cashing out short-term gains.S. investors holding individual stock outside employer plans often own investments besides equities. households. and hybrid mutual funds. and household financial assets. the mean is six. education. Equity Ownership in America 33 . and college graduates. Households Own Individual Stock Outside Employer Plans Nearly 22 million U. which represents 19 percent of their median household financial assets (Figure 28). Nearly 90 percent are willing to take average. A large majority of investors with individual stock outside employer plans also own stock mutual funds. and 37 percent own three to nine. Assets held in individual stock outside employer plans increase with age.8 million individuals owned individual stock outside employer-sponsored retirement plans in 1999 (see Figure 12 on page 13). Most are married. Thirteen percent of these investors own stock in a foreign company. household income.4 percent of all U.000 (Figure 27). Most owners of individual stock outside employer plans describe themselves as longterm investors who employ a buy-and-hold investment philosophy. or substantial risk with their equity investments. Only one-fifth say they frequently make individual stock trades. employed.CHAPTER 2 Owners of Individual Stock Outside Employer-sponsored Retirement Plans Characteristics of Owners of Individual Stock Outside Employer Plans One-fifth of U.S. above-average. and nearly three-fifths solely bought a stock mutual fund as their first equity. The median number of individual stocks owned outside such plans is three. In addition. households.

Multiple responses included.FIGURE 27 Investor Characteristics—Ownership of Individual Stock Outside Employer-sponsored Retirement Plans1 Median Age Household income Household financial assets2 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married College or postgraduate degree Employed Retired from lifetime occupation Equity investments owned: Individual stock (net)3 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)3 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Bought first equity: Before 1990 1990 to 1995 1996 or later Source of first equity purchase: Inside employer-sponsored retirement plan Outside employer-sponsored retirement plan Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Non-equity investments held:3 Savings accounts. Includes assets in employer-sponsored retirement plans but excludes value of primary residence.000 29 17 53 69 62 76 25 100 28 100 75 50 60 70 20 10 21 79 31 59 10 83 26 13 18 24 32 39 34 76 60 9 33 46 6 6 Refers to the household’s responding financial decisionmaker for investments. 34 Equity Ownership in America . money market deposit accounts. or certificates of deposit Bond investments (net)3 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage Have IRA Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 3 49 years $62. Note: Number of respondents varies.500 $140.

999 $5.000 to $9.000 769 Equity Ownership in America 35 .000 to $999.999 $500.000 $26.999 $30.000 to $4.000 to $29.000 to $99.000 to $199.999 $200.000 to $499.999 $1.FIGURE 28 Investment Characteristics—Ownership of Individual Stock Outside Employer-sponsored Retirement Plans (percent of equity owners with individual stock outside employer-sponsored retirement plans) Individual Stock Assets Held Outside Employer-sponsored Retirement Plans Less than $1.999 $100.999 $10.000.000 $1.000 or more Mean Median Number of respondents Number of Individual Stocks Owned Outside Employer-sponsored Retirement Plans 1 2 3 to 5 6 to 9 10 to 19 20 or more Mean Median Number of respondents Ownership of Foreign Stock Outside Employer-sponsored Retirement Plans Own foreign stock Do not own foreign stock Number of respondents Length of Ownership of Individual Stock Outside Employer-sponsored Retirement Plans 2 years or less 3 to 5 years 6 to 10 years 11 to 15 years 16 to 20 years 21 to 30 years More than 30 years Mean Median Number of respondents 13 15 18 14 12 12 16 10 years 8 years 973 13 87 995 27 17 26 11 12 7 6 3 971 9 13 10 19 23 9 9 4 4 $173.

Includes firms such as E-Trade or Ameritrade that only offer online investing. Many Investors Bought Individual Stock Outside Employer Plans from a Full-service Broker Forty-four percent of owners of individual stock outside employer plans purchased those stocks from a full-service broker. About one in ten bought stock either from an independent financial planner or an online firm.FIGURE 29 Purchase Channels Used—Ownership of Individual Stock Outside Employer-sponsored Retirement Plans1 (percent of equity owners with individual stock outside employer-sponsored retirement plans) Full-service brokerage Directly from the company issuing the stock Discount brokerage Gift or inheritance Independent financial planner Online brokerage firm2 Bank or savings institution Insurance company Number of respondents 1 2 44 23 20 17 11 9 7 2 1.023 Multiple responses included. Their median tenure is eight years. Excludes full-service brokerages. 36 Equity Ownership in America . 24 See text footnote 14 on page 8 for the definition of an individual stock transaction. the mean is ten. In fact. discount brokerages. banks or savings institutions. Individual Stock Transaction Activity Outside Employer Plans in 199824 About Half of the Investors with Individual Stock Outside Employer Plans Executed Trades in 1998 Fifty-two percent of investors who own individual stock outside employer plans bought or sold stock outside such plans in 1998 (Figure 30). 23 percent bought directly from the issuer. or insurance companies offering online brokerage services. independent financial planners. 40 percent have held individual stock outside retirement plans for more than 15 years. and 7 percent only sold stock. Most investors with individual stock outside employer plans have owned these investments for quite some time. About 60 percent both bought and sold stock. and 20 percent purchased from a discount broker (Figure 29). 32 percent only bought individual stock. Almost one-fifth received the stock they own outside such plans as a gift or inheritance.

The median number of individual stock sales conducted this way was six. Nearly one-fifth conducted 20 or more individual stock purchases over the Internet. Eighteen percent conducted ten or more individual stock sales. Most made one to three purchases but a significant number made 10 or more purchases (Figure 31). the mean was 10 (Figure 33).021 1 Number of respondents = 530 See text footnote 14 on page 8 for the definition of an individual stock transaction. the mean was eight (Figure 33).FIGURE 30 Transaction Activity in 1998 — Ownership of Individual Stock Outside Employer-sponsored Retirement Plans Made an Individual Stock Transaction1 (percent of equity owners with individual stock outside employersponsored retirement plans) Type of Individual Stock Transaction Conducted (percent of individual stock transactors outside employer-sponsored retirement plans) 61 Both bought and sold individual stock No 48 52 Yes 7 Only sold individual stock 32 Only bought individual stock Number of respondents = 1. However. Eighty percent of buyers of individual stock outside employer plans did not use the Internet for their purchases. and 21 percent conducted four to nine individual stock sales (Figure 31). the mean was five. The volume of individual stock sales over the Internet in 1998 was similar to that of individual stock purchases. Nearly one-quarter conducted 20 or more individual stock sales over the Internet. Sellers of Individual Stock Outside Employer Plans Typically Made Two Sales The median number of individual stock sales outside employer plans in 1998 was two. Buyers of Individual Stock Outside Employer Plans Typically Made Four Purchases The median number of individual stock purchases outside employer-sponsored retirement plans in 1998 was four. the mean was six. Nineteen percent of individual stock sellers outside employersponsored retirement plans in 1998 placed sales orders over the Internet (Figure 32). the 20 percent that did tended to transact fairly often (Figure 32). Sixty-one percent of individual stock sellers outside employer plans sold shares in one to three individual stocks. Their median number of Internet stock purchases was five. Equity Ownership in America 37 .

FIGURE 31 Purchases and Sales in 1998 — Ownership of Individual Stock Outside Employer-sponsored Retirement Plans Number of Purchases (percent of equity owners conducting individual stock purchases outside employer-sponsored retirement plans) 1 2 to 3 4 to 5 6 to 9 10 to 19 20 or more Mean Median Number of respondents 18 30 19 10 12 11 6 4 455 Number of Sales (percent of equity owners conducting individual stock sales outside employer-sponsored retirement plans) 1 2 to 3 4 to 5 6 to 9 10 to 19 20 or more Mean Median Number of respondents 33 28 13 8 7 11 5 2 324 Most Recent Individual Stock Purchase or Sale Outside Employer Plans Savings Are Most Often the Source of Money for Individual Stock Purchases Outside Employer Plans Fifty-two percent of investors who bought individual stock outside employer-sponsored retirement plans in 1998 said they used accumulated savings to finance the purchase (Figure 34). Eighteen percent reinvested some of the proceeds and spent the rest. More than three-quarters of those who reinvested the proceeds used the money to buy shares of other stock. Thirty-eight percent used proceeds from the sale of another investment. 25 Includes automatic reinvestment of dividends through dividend reinvestment plans (DRIPs). Just 14 percent spent all of the proceeds.25 Proceeds from the Sale of Individual Stock Outside Employer Plans Are Usually Reinvested More than two-thirds of those who sold shares of individual stock outside employer-sponsored retirement plans reinvested all of the proceeds (Figure 35). 38 Equity Ownership in America . less than a quarter used the proceeds to purchase stock mutual fund shares. Thirty-four percent reinvested dividends they had received. in most instances the sale of shares of other publicly traded stock.

used the Internet No. automatic deductions from savings Tax refund Some other source 1 52 38 30 6 4 34 11 8 8 5 2 7 Multiple responses included. Note: Number of respondents varies Equity Ownership in America 39 . did not use the Internet Number of respondents 19 81 325 FIGURE 33 Number of Internet Purchases or Sales in 1998 — Ownership of Individual Stock Outside Employer-sponsored Retirement Plans Individual Stock Purchases Made Over the Internet (percent of Internet individual stock purchasers transacting outside employer-sponsored retirement plans) 1 to 2 3 to 5 6 to 9 10 to 19 20 or more Mean Median Number of respondents Note: Small sample sizes. did not use the Internet Number of respondents 20 80 455 Use of the Internet for Individual Stock Sales (percent of individual stock sellers transacting outside employer-sponsored retirement plans) Yes.FIGURE 32 Internet Use for Purchases and Sales in 1998 — Ownership of Individual Stock Outside Employer-sponsored Retirement Plans Use of the Internet for Individual Stock Purchases (percent of individual stock purchasers transacting outside employer-sponsored retirement plans) Yes. used the Internet No. automatic deductions from a paycheck Bonus Inheritance or gift Regular. Individual Stock Sales Made Over the Internet (percent of Internet individual stock sellers transacting outside employer-sponsored retirement plans) 25 29 8 16 19 8 5 90 1 to 2 3 to 5 6 to 9 10 to 19 20 or more Mean Median Number of respondents 24 21 17 14 24 10 6 58 FIGURE 34 Source of Money for Most Recent Purchase in 1998 — Ownership of Individual Stock Outside Employer-sponsored Retirement Plans1 (percent of individual stock purchasers transacting outside employer-sponsored retirement plans) Accumulated savings Proceeds from the sale of other investments (net)1 Shares of other publicly traded stock Shares of stock mutual funds Non-equity investments Reinvestment of dividends Regular.

FIGURE 35 Disposition of Proceeds from Most Recent Sale in 1998 — Ownership of Individual Stock Outside Employer-sponsored Retirement Plans Disposition of Proceeds (percent of individual stock sellers outside employer-sponsored retirement plans) How Proceeds were Reinvested1 (percent of individual stock sellers who reinvested the proceeds) Reinvested all the proceeds 68 76 18 14 Spent all the proceeds 22 Spent part of the proceeds and reinvested part of the proceeds 22 Purchased shares of other individual stock Purchased shares of stock mutual funds Purchased some other type of investment Number of respondents = 316 1 Multiple responses included. 40 Equity Ownership in America . Number of respondents varies.

The majority are covered by employer-sponsored retirement plans and most own IRAs. The typical investor with stock mutual funds outside employer plans is 48 years old. Assets held in stock mutual funds outside employer plans increase with age. Many owners of stock mutual funds outside employer-sponsored retirement plans own other types of mutual funds — 50 percent own hybrid funds.000 (Figure 36). money market funds. bond funds. Stock mutual fund shareholders outside employer plans tend to employ a long-range financial strategy. more than threequarters are employed.S. Most say they consult a professional financial adviser when making investment decisions. usually a stock fund. and 89 percent say they adhere to a buy-and-hold investment philosophy.000 in stock funds. and own individual stock.S. and almost three-fifths are college graduates. Sixty percent purchased their first equity before 1990.000 and household financial assets of $120. usually outside such plans. outside an employer plan. Eighty percent will take average or aboveaverage risk with their equity investments.2 percent of all U. and roughly one in 10 own individual bonds. More than half also own stock mutual funds inside employer-sponsored retirement plans. Most bought their first equity. Nearly 70 percent are married. which represents 22 percent of their household financial assets (Figure 37). Ninety-eight percent view their equity investments as savings for the long-term. households — and 44. Households Own Stock Mutual Funds Outside Employer Plans Nearly 28 million households — representing 27. education. Stock Mutual Fund Portfolios Outside Employer Plans Are Typically Small Owners of stock mutual funds outside employer-sponsored retirement plans hold a median of $26. with household income of $63. About one-third own investment real estate.CHAPTER 3 Owners of Stock Mutual Funds Outside Employer-sponsored Retirement Plans Characteristics of Owners of Stock Mutual Funds Outside Employer Plans More than One-fourth of U. Equity Ownership in America 41 .4 million individuals owned stock mutual funds outside employer plans in January 1999 (see Figure 12 on page 13). 35 percent. Only 14 percent say they frequently make stock mutual fund trades. and household financial assets. and 22 percent. household income.

Includes assets in employer-sponsored retirement plans but excludes value of primary residence. money market deposit accounts. Multiple responses included.FIGURE 36 Investor Characteristics — Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans1 Median Age Household income Household financial assets2 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married College or postgraduate degree Employed Retired from lifetime occupation Equity investments owned: Individual stock (net)3 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)3 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Bought first equity: Before 1990 1990 to 1995 1996 or later Source of first equity purchase: Inside employer-sponsored retirement plan Outside employer-sponsored retirement plan Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Non-equity investments held:3 Savings accounts. or certificates of deposit Bond investments (net)3 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage Have IRA Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 3 48 years $63.000 $120.000 26 21 54 69 58 77 24 52 17 48 100 53 100 60 26 15 22 78 20 66 14 84 28 11 22 26 50 35 32 78 65 8 31 49 7 4 Refers to the household’s responding financial decisionmaker for investments. 42 Equity Ownership in America . Note: Number of respondents varies.

999 $20.000 to $19.500 $26.999 $1.211 52 48 1.000 to $9.125 29 22 15 17 11 5 1 4 2 1.155 14 11 15 22 17 10 8 2 2 $101.999 $200.999 $50.999 $500.000 $5.000 to $49.000 or more Mean Median Number of respondents Number of Stock Mutual Funds Owned Outside Employer-sponsored Retirement Plans 1 2 3 4 to 5 6 to 9 10 to 19 20 or more Mean Median Number of respondents Ownership of International or Global Stock Mutual Funds Outside Employer-sponsored Retirement Plans Own international or global stock mutual funds Do not own international or global stock mutual funds Number of respondents Length of Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans 2 years or less 3 to 5 years 6 to 10 years 11 to 15 years 16 to 20 years 21 to 30 years More than 30 years Mean Median Number of respondents 18 19 25 15 10 7 6 12 years 10 years 1.000 to $199.000 963 Equity Ownership in America 43 .000 to $99.000 to $499.000 to $999.999 $100.999 $10.FIGURE 37 Investment Characteristics — Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans (percent of equity owners with stock mutual funds outside employer-sponsored retirement plans) Stock Mutual Fund Assets Held Outside Employer-sponsored Retirement Plans Less than $5.000.

Thirty-seven percent bought or sold stock fund shares outside such plans (Figure 39). banks or savings institutions. Two-thirds of these households own three or fewer stock mutual funds outside employer plans. Owners of Stock Funds Outside Employer Plans Use Various Purchase Channels Full-service brokers and mutual fund companies are the chief channels used to purchase stock mutual funds outside employer plans (Figure 38). The median number of stock mutual funds owned outside employer plans is two. Nearly two-thirds of stock fund owners outside employer plans made no transactions during the year. and online brokerage firms. the mean is four. Excludes full-service brokerages. Includes firms such as E-Trade or Ameritrade that only offer online investing.FIGURE 38 Purchase Channels Used — Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans1 (percent of equity owners with stock mutual funds outside employer-sponsored retirement plans) Full-service brokerage Directly from the fund company Independent financial planner Discount brokerage Bank or savings institution Insurance company Gift or inheritance Online brokerage firm 2 33 26 20 10 10 8 5 1 1. Less frequent sources include independent financial planners. In contrast. or insurance companies offering online brokerage services. banks. independent financial planners. discount brokerages. More than half own global or international stock mutual funds. Owners of stock mutual funds outside employer plans tend to be experienced investors. banks or savings institutions. discount brokers. or insurance companies offering online brokerage services. 52 percent of individual stock owners outside retirement plans bought or sold individual stock during the year. discount brokerages. the median tenure in these funds is 10 years. 44 Equity Ownership in America . insurance agents. and another 17 percent own six or more. Seventeen percent own four or five funds. Excludes full-service brokerages. 26 Includes firms such as E-Trade or Ameritrade that only offer online investing. Sixty-three percent have owned stock funds outside retirement plans for more than five years. independent financial planners.26 Stock Mutual Fund Transaction Activity Outside Employer Plans in 1998 Most Investors Did Not Execute Stock Fund Transactions in 1998 Outside employer plans. stock mutual fund transaction activity was less extensive than individual stock transaction activity in 1998.289 Number of respondents 1 2 Multiple responses included.

Equity Ownership in America 45 .FIGURE 39 Transaction Activity in 1998 — Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans Made a Stock Fund Transaction1 (percent of equity owners with stock mutual funds outside employer-sponsored retirement plans) Type of Stock Fund Transaction Conducted (percent of stock mutual fund transactors outside employer-sponsored retirement plans) 43 Both bought and sold stock mutual funds 8 No 63 37 Yes Only sold stock mutual funds 49 Only bought stock mutual funds Number of respondents = 1. FIGURE 40 Purchases and Sales in 1998 — Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans Number of Purchases1 (percent of equity owners conducting stock mutual fund purchases outside employer-sponsored retirement plans) 1 2 to 3 4 to 5 6 to 9 10 to 19 20 or more Mean Median Number of respondents 1 Number of Sales (percent of equity owners conducting stock mutual fund sales outside employer-sponsored retirement plans) 28 27 11 6 20 8 6 3 395 1 2 to 3 4 to 5 6 to 9 10 to 19 20 or more Mean Median Number of respondents 47 29 11 6 6 1 3 2 216 Includes automatic payroll or savings account purchases of stock funds outside employer plans.270 1 Number of respondents = 461 See text footnote 14 on page 8 for the definition of a stock mutual fund transaction.

did not use the Internet Number of respondents 7 93 216 FIGURE 42 Number of Internet Purchases or Sales in 1998 — Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans Stock Mutual Fund Purchases Made Over the Internet (percent of Internet stock mutual fund purchasers outside employer-sponsored retirement plans) 1 to 2 3 to 5 6 to 9 10 to 19 20 or more Mean Median Number of respondents Note: Small sample sizes. used the Internet No. the median number of Internet stock mutual fund purchases was four. 43 percent bought and sold stock funds. and 8 percent sold only stock funds. More than half of stock fund owners who made purchases bought on three or fewer occasions (Figure 40). These investors rarely used the Internet to purchase stock funds (Figure 41). Stock Mutual Fund Sales Made Over the Internet (percent of Internet stock mutual fund sellers outside employer-sponsored retirement plans) 33 27 4 30 6 7 4 19 Mean Median Number of respondents 5 2 15 1 2 3 to 5 6 or more 14 47 14 26 Forty-nine percent of those who made stock mutual fund transactions outside retirement plans bought only stock funds. and only 6 percent conducted 20 or more stock mutual fund purchases (Figure 42). More than one-quarter made 10 or more purchases. did not use the Internet Number of respondents 5 95 396 Use of the Internet for Stock Mutual Fund Sales (percent of stock mutual fund sellers transacting outside employer-sponsored retirement plans) Yes.27 27 The sample size for this analysis was very small. Buyers of Stock Funds Outside Employer Plans Typically Made Three Purchases The median number of stock mutual fund purchases outside employer-sponsored retirement plans in 1998 was three. used the Internet No. 46 Equity Ownership in America . Of those who did.FIGURE 41 Internet Use for Purchases and Sales in 1998 — Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans Use of the Internet for Stock Mutual Fund Purchases (percent of stock mutual fund purchasers transacting outside employer-sponsored retirement plans) Yes.

automatic deductions from a paycheck Tax refund Some other source 1 48 48 23 12 8 3 18 10 8 6 2 10 Multiple responses included. automatic deductions from a savings Inheritance or gift Bonus Regular.FIGURE 43 Source of Money for Most Recent Purchase in 1998 — Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans1 (percent of stock mutual fund purchasers outside employer-sponsored retirement plans) Accumulated savings Reinvestment of dividends Proceeds from the sale of other investments (net)1 Shares of other stock mutual funds Shares of publicly traded stock Non-equity investments Regular. Purchased some other type of investment Note: Number of respondents varies. Note: Number of respondents varies. Equity Ownership in America 47 . FIGURE 44 Disposition of Proceeds from Most Recent Sale in 1998 — Ownership of Stock Mutual Funds Outside Employer-sponsored Retirement Plans Disposition of Proceeds (percent of stock mutual fund sellers outside employer-sponsored retirement plans) How Proceeds were Reinvested1 (percent of stock mutual fund sellers who reinvested the proceeds) 57 Reinvested all the proceeds 75 26 Spent all the proceeds 17 34 Spent part of the proceeds and reinvested part of the proceeds Purchased shares of other stock mutual funds Number of respondents = 210 1 19 Purchased shares of individual stock Multiple responses included.

Sellers of Stock Funds Outside Employer Plans Typically Made Two Sales The median number of stock mutual fund sales outside employer plans in 1998 was two. Seventy-five percent of those who reinvested the proceeds used the money to buy shares of other stock mutual funds. usually the sale of shares of other stock mutual funds. 28 Includes automatic reinvestment of dividends. These investors rarely sold stock funds over the Internet (Figures 41 and Figure 42). Proceeds from the Sale of Stock Funds Outside Employer Plans Are Usually Reinvested The vast majority of those who sold shares of stock mutual funds outside employer plans reinvested some or all of the proceeds from the sale (Figure 44). More than three-quarters of investors selling stock mutual funds outside employer plans made three or fewer transactions (Figure 40). and 18 percent employed regular.28 Nearly one-quarter used proceeds from the sale of other investments. About one-quarter spent all of the proceeds they received. and 34 percent bought shares of individual stock. Only 7 percent conducted 10 or more stock mutual fund sales. Most Recent Stock Mutual Fund Purchase or Sale Outside Employer Plans Investors who bought stock mutual funds outside employer-sponsored retirement plans most often used accumulated savings and reinvested dividends to finance their most recent purchases of stock mutual funds (Figure 43). 48 Equity Ownership in America . automatic deductions from a savings plan.

Most made their initial equity purchase before 1990. Some also own money market funds. hybrid and bond funds. households — and 14.7 million households — representing 10. 29 The format of this chapter differs from those of Chapters 2 and 3 because transactions conducted inside and outside employer-sponsored retirement plans by owners of individual stock and stock mutual funds are dissimilar.CHAPTER 4 Owners of Individual Stock and Stock Mutual Funds Inside EmployerSponsored Retirement Plans 29 Characteristics of Owners of Individual Stock Inside Employer Plans One in 10 U. money market deposit accounts. One-fifth own three to five.5 percent of U.30 Very few hold foreign stock inside their retirement plans.0 million individuals owned individual stock inside employer-sponsored retirement plans in 1999 (see Figure 12 on page 13). Individual Stock Typically Represents Less than One-third of Assets of Investors with Individual Stock in Employer Plans Investors with individual stock in employer plans have a median of $30.S. and investment real estate.500 (Figure 45). 30 Equity Ownership in America 49 .000 and median household financial assets of $96. This amount represents 31 percent of their median household financial assets. Among their non-equity investments. or savings accounts. usually individual stock. The vast majority of these investors also own individual stock outside employer plans and own stock mutual funds. and can accept short-term market fluctuations. Households Own Individual Stock Inside Employer Plans A total of 10. employed. Approximately three-quarters of equity investors owning individual stock inside employer plans indicated they own stock other than their company’s stock through such plans. with median household income of $65. and college graduates.000 in two stocks in these plans (Figure 46).S. these investors are most likely to have certificates of deposit. The majority are married. Most have a long-term investment outlook. Investors owning individual stock in employer plans owned individual stock in these plans for a median of 12 years. The financial decisionmakers in these households are a median of 45 years old. and another fifth own six or more. do not perceive themselves as frequent stock traders. More than half own IRAs. The majority of investors with individual stock inside employer plans first purchased equities in these plans. Nearly three-fifths own one or two stocks in employer plans.

Note: Number of respondents varies. money market deposit accounts. 50 Equity Ownership in America . Includes assets in employer-sponsored retirement plans but excludes value of primary residence.500 30 12 58 74 55 88 14 100 100 62 91 89 47 63 24 13 62 38 60 12 27 85 23 11 16 20 30 39 29 58 11 34 45 4 6 Refers to the household’s responding financial decisionmaker for investments. Multiple responses included.FIGURE 45 Investor Characteristics — Ownership of Individual Stock Inside Employer-sponsored Retirement Plans1 Median Age Household income Household financial assets2 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married College or postgraduate degree Employed Retired from lifetime occupation Equity investments owned: Individual stock (net)3 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)3 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Bought first equity: Before 1990 1990 to 1995 1996 or later Source of first equity purchase: Inside employer-sponsored retirement plan Outside employer-sponsored retirement plan Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Non-equity investments held:3 Savings accounts.000 $96. or certificates of deposit Bond investments (net)3 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have IRA Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 3 45 years $65.

000 to $199.000 to $9.000 to $99.000 to $999.999 $200.000 336 Equity Ownership in America 51 .999 $30.999 $500.999 $100.999 $10.000 to $499.999 $1.000.800 $30.000 to $4.000 $1.FIGURE 46 Investment Characteristics — Ownership of Individual Stock Inside Employer-sponsored Retirement Plans (percent of equity owners with individual stock inside employer-sponsored retirement plans) Individual Stock Assets Held Inside Employer-sponsored Retirement Plans Less than $1.000 to $29.000 or more Mean Median Number of respondents Number of Individual Stocks Owned Inside Employer-sponsored Retirement Plans 1 2 3 to 5 6 to 9 10 to 19 20 or more Mean Median Number of respondents Ownership of Foreign Stock Inside Employer-sponsored Retirement Plans Own foreign stock Do not own foreign stock Number of respondents Length of Ownership of Individual Stock Inside Employer-sponsored Retirement Plans 2 years or less 3 to 5 years 6 to 10 years 11 to 15 years 16 to 20 years 21 to 30 years More than 30 years Mean Median Number of respondents 14 16 21 18 14 12 5 16 years 12 years 433 12 88 414 40 18 20 7 9 5 5 2 376 6 9 10 12 27 14 7 2 2 $105.999 $5.

More than 70 percent are married.S. Twenty-eight percent of asset allocation changes resulted in the purchase of individual stock. Among those who did. and like owners of stock mutual funds outside employer plans. About one-quarter own investment real estate. Fifty-one percent of this group also own stock mutual funds outside employer-sponsored retirement plans. Asset Allocation Changes Typically Involved Stock Mutual Fund Shares Most investors with equities inside employer-sponsored retirement plans did not reallocate assets in these plans in 1998 (Figure 52).31 The type of equity owned had little effect on changes in payroll contributions. and more than half are college graduates. The majority own international or global stock mutual funds through their retirement plans.9 million individuals owned stock mutual funds inside employer-sponsored retirement plans in 1999 (see Figure 12 on page 13). 90 percent are employed. mostly purchases. Most have an IRA. representing 38 percent of their median household financial assets (Figure 48). Stock Mutual Funds Typically Represent About One-third of Assets of Investors with Stock Mutual Funds in Employer Plans Shareholders owning stock mutual funds inside employer plans have a median of $30. usually a stock mutual fund. with household income of $63. and 24 percent in the sale of individual stock (Figure 54). The typical investor with stock mutual funds in these plans is 44 years old. 52 Equity Ownership in America .000 and household financial assets of $80. 70 percent made one change (Figure 50). and are unconcerned about short-term market fluctuations.000 invested in three stock mutual funds through these plans. nearly two-thirds made one change. nearly all describe themselves as long-term equity investors. They say they follow a buy-and-hold investment approach. Nearly 70 percent of investors owning stock mutual funds inside employer plans purchased their first equity there. Households Own Stock Mutual Funds Inside Employer Plans Approximately 29 million households — representing 27. More than half purchased their first equity before 1990. households — and 39. Equity Owner Changes to Employer Plans in 1998 Payroll Contribution Changes Usually Led to Increased Stock Mutual Fund Purchases Most equity owners did not make changes to employer-sponsored retirement plan contributions in 1998 (Figure 49).S. 31 Twenty-two percent of investors owning equities inside employer plans made a payroll contribution change and an asset allocation change in 1998. and even fewer own bond funds. Of those who did. Nearly two-thirds of payroll contribution changes by equity owners resulted in increased purchases of stock mutual fund shares (Figure 51). As with payroll contribution changes.9 percent of U. asset allocation changes tended to involve stock mutual funds. and less than 20 percent made three or more changes (Figure 53). Very few payroll changes involved individual stock.000 (Figure 47). Less than half own individual stock or hybrid funds.Characteristics of Owners of Stock Mutual Funds Inside Employer Plans Nearly Three in 10 U.

Note: Number of respondents varies. money market deposit accounts. or certificates of deposit Bond investments (net)3 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage Have IRA Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 3 44 years $63. Multiple responses included.000 25 17 58 72 56 90 11 45 22 38 100 100 51 55 30 15 69 31 17 72 11 83 22 8 17 21 43 27 24 100 56 10 36 45 5 4 Refers to the household’s responding financial decisionmaker for investments.000 $80. Equity Ownership in America 53 .FIGURE 47 Investor Characteristics — Ownership of Stock Mutual Funds Inside Employer-sponsored Retirement Plans1 Median Age Household income Household financial assets2 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married College or postgraduate degree Employed Retired from lifetime occupation Equity investments owned: Individual stock (net)3 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)3 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Bought first equity: Before 1990 1990 to 1995 1996 or later Source of first equity purchase: Inside employer-sponsored retirement plan Outside employer-sponsored retirement plan Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Non-equity investments held:3 Savings accounts. Includes assets in employer-sponsored retirement plans but excludes value of primary residence.

000 to $99.000 to $9.000 to $19.999 $10.900 $30.000 to $999.000 to $499.000 986 Ownership of International or Global Stock Mutual Funds Inside Employer-sponsored Retirement Plans Own international or global stock mutual funds Do not own international or global stock mutual funds Number of respondents Length of Ownership of Stock Mutual Funds Inside Employer-sponsored Retirement Plans 2 years or less 3 to 5 years 6 to 10 years 11 to 15 years 16 to 20 years 21 to 30 years More than 30 years Mean Median Number of respondents 15 21 28 17 10 7 2 11 years 8 years 1.999 $200.061 54 Equity Ownership in America .999 $1.999 $500.000 to $199.999 $50.000.FIGURE 48 Investment Characteristics — Ownership of Stock Mutual Funds Inside Employer-sponsored Retirement Plans (percent of equity owners with stock mutual funds inside employer-sponsored retirement plans) Stock Mutual Fund Assets Held Inside Employer-sponsored Retirement Plans Less than $5.000 or more Mean Median Number of respondents Number of Stock Mutual Funds Owned Inside Employer-sponsored Retirement Plans 1 2 3 4 to 5 6 to 9 10 to 19 20 or more Mean Median Number of respondents 25 24 13 21 11 4 1 4 3 1.999 $100.000 to $49.268 59 41 1.084 16 9 14 24 18 11 6 1 1 $73.999 $20.000 $5.

493 FIGURE 50 Number of Payroll Contribution Changes Made in 1998 — Ownership of Equities Inside Employer-sponsored Retirement Plans (percent of equity owners with equities inside employer-sponsored retirement plans who made payroll contribution changes) Type of Equity Owned Inside Employer-sponsored Retirement Plans Individual Stock Mutual Stock Funds 65 23 8 3 2 1 198 68 22 8 2 2 1 326 Equity Owners Who Made a Payroll Contribution Change 1 2 3 to 5 6 or more Mean Median Number of respondents 70 21 7 0 2 1 351 FIGURE 51 Characteristics of Payroll Changes in 1998 — Ownership of Equities Inside Employer-sponsored Retirement Plans1 (percent of equity owners with equities inside employer-sponsored retirement plans who made payroll contribution changes) Purchase of more individual stock shares Purchase of less individual stock shares Purchase of more stock mutual fund shares Purchase of less stock mutual fund shares 1 24 10 64 16 Multiple responses included.347 All Owners of Equities Inside Employer-sponsored Retirement Plans Yes. Note: Number of respondents varies.FIGURE 49 Payroll Contribution Changes in 1998 — Ownership of Equities Inside Employer-sponsored Retirement Plans (percent of equity owners with equities inside employer-sponsored retirement plans) Type of Equity Owned Inside Employer-sponsored Retirement Plans Individual Stock Mutual Stock Funds 26 73 762 24 75 1. Equity Ownership in America 55 . made payroll contribution changes No. did not make payroll contribution changes Number of respondents 24 76 1.

56 Equity Ownership in America .491 FIGURE 53 Number of Allocation Changes Made to Account Balance in 1998 — Ownership of Equities Inside Employer-sponsored Retirement Plans (percent of equity owners with equities inside employer-sponsored retirement plans who made allocation changes to account balance) Type of Equity Owned Inside Employer-sponsored Retirement Plans Individual Stock Mutual Stock Funds 62 19 13 5 2 1 196 62 21 14 4 2 1 297 Equity Owners Who Made Allocation Changes to Account Balance 1 2 3 to 5 6 or more Mean Median Number of respondents 64 19 13 3 2 1 324 FIGURE 54 Characteristics of Account Balance Allocation Changes — Ownership of Equities Inside Employer-sponsored Retirement Plans1 (percent of equity owners with equities inside employer-sponsored retirement plans who made allocation changes to account balance) Purchase of individual stock shares Sale of individual stock shares Purchase of stock mutual fund shares Sale of stock mutual fund shares 1 28 24 64 38 Multiple responses included.346 All Owners of Equities Inside Employer-sponsored Retirement Plans Yes. Note: Number of respondents varies.FIGURE 52 Allocation Changes Made to Account Balance in 1998 — Ownership of Equities Inside Employer-sponsored Retirement Plans (percent of equity owners with equities inside employer-sponsored retirement plans) Type of Equity Owned Inside Employer-sponsored Retirement Plans Individual Stock Mutual Stock Funds 26 73 759 22 77 1. did not make allocation change to account balance Number of respondents 22 77 1. made allocation change to account balance No.

financial. The multiplier for number of individuals per household was 1. A house.943 completed the entire survey and 393 completed part of it. Equity Ownership in America 57 . is also counted as a household. publicly traded stock or stock mutual funds.6. 2) stock mutual funds inside employer-sponsored retirement plans. an apartment or other group of rooms. A random digit dial (RDD) national probability sample was used to generate a representative sample of equity owners nationwide.32 The number of individuals who owned equities in a household was determined by asking respondents how many individuals in the household owned each type of equity. if any. The survey identified demographic. and individual stock and stock mutual fund data on equity owners nationwide. education. A household includes related family members and all unrelated persons. Interviewing and Sampling Procedures Interviews were conducted by telephone and were completed in January and February 1999. or employees who share a housing unit. 3) individual stock outside employer-sponsored retirement plans. Eligible respondents owned individual. wards. All interviews were conducted with the household decisionmaker most knowledgeable about savings and investments. and marital status.842 household financial decisionmakers were asked whether their households owned equities. or a single room is regarded as a housing unit when it is occupied or intended for occupancy as separate living quarters. such as lodgers. The 393 partial interviews with known equity owners 32 Households consist of all persons who occupy a housing unit.336 decisionmakers. and was pretested extensively to ensure that the questions were understandable to respondents. either inside or outside retirement plans at work. The questionnaire included questions to check the consistency of the data reported by respondents. 2. Another section included equity owner views on various aspects of equity investing: financial goals of equity investing. Of these. A person living alone in a housing unit. willingness to take financial risk with equity investments. and understanding of individual stock and stock mutual funds. or 48. indicated that their households owned equities —1. household financial assets. foster children.APPENDIX A Detailed Research Methodology This report summarizes results of a survey conducted by the Boston Research Group under the direction of the Investment Company Institute and the Securities Industry Association.2 percent. The final section of the survey collected demographic data on equity owners: age. The survey collected detailed information on individual stock and stock mutual fund ownership inside and outside employer-sponsored retirement plans. household income. The survey included sections on ownership of: 1) individual stock inside employer-sponsored retirement plans. A total of 4. or a group of unrelated persons sharing a housing unit as partners. and 4) stock mutual funds outside employer-sponsored retirement plans.

58 Equity Ownership in America . using the same procedures.000 1. A randomly selected sample of affluent equity owners was drawn from the Donnelly Marketing. 393 additional interviews were conducted with high-net-worth equity owners. percentages may add to more than 100 percent. Estimates derived through survey sampling are subject to sampling error. each household is assigned an affluence rating. for example. Subgroups of respondents on which percentage results are based exclude those respondents who were unable or unwilling to answer the questions that define the subgroups. The overall sampling error for the survey is plus or minus 2 percent at the 95 percent confidence level. high-net-worth respondents were assigned a weight based on the proportion of affluent equity owners in the random digit dial sample and were then included in the database. Decisionmakers who did not meet these criteria were not interviewed. that if the sample size is 1. the level of potential sampling error generally becomes smaller.2 percent 95 percent of the time.S. all household financial decisionmakers contacted were asked whether they had household income of $100. Percentages may not add to 100 because of weighting or rounding.450 1. As sample size increases. by Sample Size Percent of Responses 30 percent or 70 percent 2 2 3 3 3 3 4 9 13 Sample Size 2. these responses can be expected to be replicated for the entire population within a range of + or .050 800 500 100 50 10 percent or 90 percent 1 1 2 2 2 2 3 6 9 20 percent or 80 percent 2 2 2 2 3 3 4 8 11 40 percent or 60 percent 2 2 3 3 3 4 5 10 14 50 percent 2 2 3 3 3 4 5 10 14 This table shows. Inc.were included in the estimate of the incidence of equity ownership among U. This confidence level can be used to construct “confidence intervals” — ranges that would include the average estimate taken across all possible samples with known probability. which incorporates available financial.000 or more or household financial assets of $250. households but were not included in any other analyses. then. demographic. Affluence Model. Where respondents were allowed to provide multiple responses. Based on that information. After interviewing. Sampling Tolerances The use of sample surveys is standard practice for constructing estimates about a total population. Approximately 95 percent of the intervals figured in all possible samples would contain the average estimate taken across all samples.500 and if 10 percent of the respondents provide the same answer to a question and 90 percent provide the other answer. To ensure that high-net-worth households were represented in the study. To confirm affluence. and geographic information to build a profile of each household in the U.500 2.S. Figure 55 shows the approximate sampling error for estimates of proportions computed for the sample as a whole and for subsamples of various sizes.000 or more.500 1. FIGURE 55 Sampling Error at the 95 Percent Confidence Level for Selected Percentages of Responses.

and Stock Mutual Fund Shareholders Equity Ownership in America 59 .APPENDIX B Detailed Tabulations for All Equity Owners. Individual Stock Owners.

000 to $39.999 $1 million or more Mean Median Number of respondents Marital Status Married Divorced or separated Widowed Single Number of respondents 67 11 7 15 2.999 $75.999 $30.000 to $749.999 $20.999 $50. Individual Stock Owners.999 $150.000 1.196 10 10 12 12 14 12 8 6 10 5 47 years 47 years 1.999 $40.000 to $149.217 68 12 6 14 1.336 29 17 54 1.668 11 10 12 12 14 12 8 6 10 5 48 years 47 years 2.278 26 20 54 2.000 to $49.000 1.000 to $74.294 3 4 8 13 13 28 15 11 3 3 <1 <1 <1 $74.500 852 2 3 8 12 12 29 16 11 3 3 <1 <1 <1 $74.000 to $199.980 9 9 10 11 14 13 8 7 12 6 49 years 48 years 1.000 $10.418 69 10 7 14 1.999 $100. and Stock Mutual Fund Shareholders (percent) Type of Equity Owned Individual Stock Stock Mutual Funds All Equity Owners Household Investment Decisionmaker Male is sole decisionmaker Female is sole decisionmaker Co-decisionmakers Number of respondents Age of Respondent Less than 30 years 30 to 34 years 35 to 39 years 40 to 44 years 45 to 49 years 50 to 54 years 55 to 59 years 60 to 64 years 65 to 74 years 75 years or older Mean age Median age Number of respondents Household Income in 1998 Less than $10.999 $750.999 $500.900 $60.000 to $99.999 $200.000 to $499.236 25 20 55 1.FIGURE 56 Demographic Characteristics of All Equity Owners.000 to $19.946 60 Equity Ownership in America .300 $62.935 2 3 6 10 13 27 16 13 4 4 <1 <1 1 $87.000 to $29.700 $60.000 to $999.

223 1 15 31 26 8 19 1.618 20 80 880 16 84 1.217 5 95 1.294 5 95 1. Multiple responses included because Hispanics can be of any race.963 71 9 20 2.428 90 5 2 4 2 91 3 2 3 3 90 5 1 3 2 Percent of respondents married or living with a partner.966 63 10 26 1. Equity Ownership in America 61 .317 2 14 26 28 7 17 1.389 17 83 1.317 24 76 1.946 1 16 30 26 8 19 2.619 58 12 30 881 64 10 26 1.223 20 80 1.318 68 9 23 1.968 21 79 2.223 72 8 19 1.FIGURE 56 (continued) All Equity Owners Living with a Partner Yes No Number of respondents Education of Respondent Some high school or less High school graduate Some college or associate’s degree Completed four years of college Some graduate school Completed graduate school Number of respondents Employment Status of Respondent Employed full-time Employed part-time Not employed Number of respondents Retirement Status of Respondent Retired from lifetime occupation Not retired from lifetime occupation Number of respondents Employment Status of Spouse or Partner1 Employed full-time Employed part-time Not employed Number of respondents Retirement Status of Spouse or Partner1 Retired from lifetime occupation Not retired from lifetime occupation Number of respondents Ethnic Background2 Caucasian African-American Asian Hispanic Other 1 2 Type of Equity Owned Individual Stock Stock Mutual Funds 5 95 2.

000 $5.999 $1 million or more Mean Median Number of respondents Household Financial Assets Held Through Employer-sponsored Retirement Plans Less than $5.000 to $199.999 $25.453 12 8 14 12 10 4 8 5 13 5 2 6 $239.000 to $749.000 to $199.488 25 5 13 14 9 5 9 4 9 3 1 3 $111.000 to $74.999 $100.000 to $24.000 to $24.999 $50.000 to $999.000 to $149.500 1.000 to $99.000 to $499.300 $87.999 $150.000 to $199.000 1.999 $10.000 to $749.000 691 Stock Mutual Funds 18 10 15 13 11 5 7 5 10 3 1 3 $232.999 $75.600 $30.999 $1 million or more Mean Median Number of respondents 5 5 13 12 12 8 10 7 16 5 2 5 $232.999 $200.259 19 10 15 13 10 4 6 4 10 4 1 3 $159.999 $10.000 751 18 10 15 13 11 5 7 5 10 3 1 3 $151.000 1.000 1.000 to $24.000 $5.999 $75.000 to $49.999 $500.100 $35.900 $35.000 $5.000 1.000 to $9.000 to $999.000 to $49.315 Individual Stock 3 4 9 10 11 7 11 6 20 7 3 9 $318.300 $50.400 $33.999 $100.999 $200.000 to $99.000 to $749.999 $150.000 to $149.999 $75.000 to $499.300 $30.000 to $9.999 $25.000 to $49.999 $1 million or more Mean Median Number of respondents Household Financial Assets Held Outside Employer-sponsored Retirement Plans Less than $5.000 1.119 25 6 14 14 10 6 8 3 8 2 1 2 $91.999 $150.900 $125.999 $750.999 $25.999 $50.FIGURE 57 Financial Characteristics of All Equity Owners.000 785 22 7 15 14 10 6 8 4 9 2 1 1 $93.900 $85.000 to $149.999 $100.000 to $99.000 to $9.234 62 Equity Ownership in America .000 to $74. Individual Stock Owners.999 $10.000 to $74.999 $750. and Stock Mutual Fund Shareholders (percent) Type of Equity Owned All Equity Owners Household Financial Assets1 Less than $5.000 to $999.999 $200.999 $500.000 to $499.999 $50.999 $500.999 $750.

500 to $4.000 $1.500 1.999 $100.000 to $74.999 $200.600 $7.000 to $2.000 to $199.999 $10.000 to $2.000 to $49.000 to $19.000 to $9.000 to $29.000 to $74.000 341 29 27 9 15 8 2 5 2 2 <1 <1 <1 <1 $7.999 $5.999 $30.999 $150.S.000 to $99.000 to $19.FIGURE 57 (continued) All Equity Owners Non-equity Investments Owned2 U.999 $75.500 1.999 $10.999 $200.999 $50.800 $2.999 $5.000 to $14.499 $2.000 to $149.000 673 14 16 10 16 10 6 9 6 6 2 2 1 2 $22.S.000 to $49.000 to $149.999 $15.999 $20.999 $20.000 to $9.000 $1.000 to $99.000 526 14 16 11 16 11 5 9 6 6 2 3 1 2 $23.000 to $14. savings bonds Bank deposit accounts Individual corporate or government bonds Bond mutual funds Hybrid mutual funds Money market mutual funds Variable annuities Fixed annuities Investment real estate Assets in U.113 Equity Ownership in America 63 .999 $75.000 625 27 25 11 14 10 3 5 1 1 1 1 <1 3 $9.000 to $199.999 $150.312 11 13 9 16 12 5 8 6 8 2 4 1 3 $28.800 $10.000 to $29.999 $100.999 $50.600 $7.499 $2.000 or more Mean Median Number of respondents Type of Equity Owned Individual Stock Stock Mutual Funds 39 83 9 16 39 26 15 10 26 41 84 8 16 38 30 14 11 32 39 83 9 19 44 29 16 10 27 30 27 9 14 8 3 5 1 2 <1 1 <1 4 $7.300 $2.900 $2.000 or more Mean Median Number of respondents Assets in Bank Deposit Accounts4 Less than $1.999 $30.500 to $4.999 $15. Savings Bonds3 Less than $1.

000 $16.999 $100.000 to $99.999 $50.000 to $199.000 to $14.999 $200.000 to $9.000 to $99.999 $15.999 $10.000 to $74.999 $5.000 to $14.000 to $19.000 60 3 6 4 9 16 6 17 9 9 2 9 4 7 $55.499 $2.000 $1.999 $200.900 $15.999 $30.000 to $29.000 452 64 Equity Ownership in America .499 $2.999 $20.500 to $4.000 68 1 9 12 13 14 8 10 11 11 <1 5 1 $34.000 or more Mean Median Number of respondents Assets in Bond Mutual Funds6 Less than $1.999 $200.500 166 3 9 9 13 12 7 12 8 9 3 7 2 7 $48.900 $16.000 to $74.000 to $199.000 171 1 11 12 11 13 6 11 13 10 0 6 1 6 $40.000 92 2 9 12 14 14 8 10 11 11 <1 5 1 3 $34.000 239 3 9 9 13 12 7 12 8 9 3 7 2 7 $50.000 to $19.999 $15.400 $20.000 to $49.000 to $149.000 to $9.000 to $149.000 $1.999 $10.999 $15.999 $20.999 $150.000 to $2.999 $75.499 $2.000 $1.500 $12.FIGURE 57 (continued) All Equity Owners Assets in Individual Corporate or Government Bonds5 Less than $1.999 $10.000 to $49.300 $20.000 to $29.000 to $74.999 $5.000 to $2.500 to $4.999 $100.000 to $199.000 or more Mean Median Number of respondents Assets in Hybrid Mutual Funds7 Less than $1.999 $75.999 $150.999 $75.000 470 2 6 8 12 11 8 15 8 9 2 7 2 9 $60.999 $30.500 to $4.000 or more Mean Median Number of respondents Type of Equity Owned Individual Stock Stock Mutual Funds 2 6 3 8 15 6 18 8 9 2 8 5 9 $68.000 78 3 4 4 8 13 5 17 9 11 0 10 5 11 $78.999 $150.999 $30.000 to $149.400 $20.000 to $49.999 $50.000 to $99.999 $5.000 to $19.000 to $9.999 $20.000 to $14.000 to $29.999 $50.600 $15.999 $100.000 to $2.300 $25.

999 $200.800 $20.000 to $29.000 to $14.000 to $199.999 $100.000 to $74.000 52 1 6 8 13 11 6 17 12 10 6 3 1 7 $43.000 to $74.000 to $49.999 $30.999 $15.500 $21.999 $20.800 318 5 12 12 14 14 6 12 7 8 2 4 1 3 $29.000 103 5 5 2 10 9 2 20 18 10 4 4 1 10 $55.500 to $4.000 to $2.000 $1.999 $75.999 $20.000 to $9.100 199 7 14 11 16 13 5 13 8 6 2 3 1 2 $25.000 $1.499 $2.000 to $19.999 $150.999 $100.999 $50.000 to $14.000 or more Mean Median Number of respondents Assets in Variable Annuities9 Less than $1.000 to $199.FIGURE 57 (continued) All Equity Owners Assets in Money Market Mutual Funds8 Less than $1.000 to $74.999 $15.999 $10.999 $50.000 to $99.000 $1.999 $150.800 $25.500 to $4.000 to $49.000 to $29.999 $200.999 $5.000 to $149.999 $200.999 $10.000 to $149.999 $150.499 $2.000 to $2.999 $5.000 to $9.400 $25.000 to $19.999 $100.000 to $99.000 to $99.000 to $19.000 185 2 6 9 14 7 5 8 17 13 6 8 3 3 $42.000 to $149.999 $10.500 to $4.999 $20.000 to $14.000 170 2 7 7 12 11 5 17 13 10 5 4 1 6 $43.999 $30.700 $20.999 $5.000 or more Mean Median Number of respondents Type of Equity Owned Individual Stock Stock Mutual Funds 7 13 11 16 13 5 12 8 6 2 3 1 2 $24.999 $50.499 $2.000 101 2 8 9 13 9 4 12 16 12 4 5 3 2 $38.999 $75.000 or more Mean Median Number of respondents Assets in Fixed Annuities10 Less than $1.999 $15.000 89 Equity Ownership in America 65 .000 to $199.000 to $49.000 to $2.000 to $29.999 $75.400 $20.999 $30.000 to $9.400 297 2 7 9 13 8 5 12 16 13 4 5 3 3 $39.

499 $2.000 to $74.000 or more Mean Median Number of respondents 1 2 3 4 5 6 7 8 9 Type of Equity Owned Individual Stock Stock Mutual Funds 1 1 3 3 7 4 9 12 17 5 10 6 21 $197.700 $80.500 to $4.999 $50. 10 11 66 Equity Ownership in America . savings bonds. Percent of respondents owning hybrid mutual funds.000 to $9. Percent of respondents owning U.000 to $14.000 252 1 1 2 3 7 4 10 14 18 6 9 6 20 $204.200 $50.000 to $49.999 $10.999 $15.000 to $99.999 $5.FIGURE 57 (continued) All Equity Owners Assets in Investment Real Estate11 Less than $1. Multiple responses included.999 $30.999 $75.999 $100.999 $200.000 to $149.000 to $19.999 $20. Percent of respondents owning bank deposit accounts.000 to $2. Percent of respondents owning variable annuities.000 to $199. Percent of respondents owning bond mutual funds. Percent of respondents owning investment real estate. Percent of respondents owning money market mutual funds. Percent of respondents owning fixed annuities.S.000 410 1 1 2 3 5 3 7 10 14 6 11 8 28 $271.000 to $29. Percent of respondents owning individual corporate or government bonds.500 $55.000 345 Excludes primary residence but includes assets in employer-sponsored retirement plans.000 $1.999 $150.

APPENDIX C Detailed Tabulations for All Equity Owners by Key Demographic Variables Equity Ownership in America 67 .

Note: Number of respondents varies. or federal government plan Other5 Have IRA (net)4 Traditional IRA Roth IRA Ethnic background:6 Caucasian African-American Asian Hispanic Other 1 2 3 4 5 6 Female is Sole Decisionmaker Co-decisionmakers 46 years $55. Multiple responses included. Other includes employee stock ownership plans (ESOPs) and SEP-IRAs.000 2 50 years $36. 68 Equity Ownership in America .500 $87.000 50 4 7 60 22 82 59 23 3 19 7 24 48 16 69 80 29 23 92 5 1 51 18 83 77 18 16 20 80 21 11 15 17 40 26 27 77 36 55 5 13 12 53 47 12 91 3 2 3 3 85 24 9 19 27 38 27 21 75 34 48 10 14 14 48 44 10 89 7 0 3 3 84 21 8 16 21 39 26 28 83 41 60 9 22 13 54 48 11 90 5 2 4 2 Refers to the household’s responding financial decisionmaker for investments.000 $60. Percent of shareholders married or living with a partner.000 $104.FIGURE 58 Characteristics of Equity Owners by Investment Decisionmaker1 Male is Sole Decisionmaker Median Age Household income Household financial assets Percent Married Living with a partner Widowed College or postgraduate degree Completed graduate school Employed Spouse or partner employed3 Retired from lifetime occupation Spouse or partner retired from lifetime occupation Non-equity investments held:4 Savings accounts. Multiple responses included because Hispanics can be of any race. money market deposit accounts. or certificates of deposit Bond investments (net)4 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage (net)4 Traditional defined-benefit pension plan 401(k) plan 403(b) plan State. local. Includes assets in employer-sponsored retirement plans but excludes value of primary residence.000 46 years $62.

000 4 0 $50.000 5 1 $35.000 4 0 59 23 51 81 55 56 47 13 40 87 50 60 53 21 44 87 62 56 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first equity purchase: Before 1990 1990 to 1995 1996 or later Source of first equity purchase: Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 54 28 18 50 26 24 55 28 16 38 62 41 59 48 52 36 53 6 29 64 11 29 61 10 13 34 43 5 5 6 25 56 8 6 8 31 47 7 7 See text footnote 14 on page 8 for the definition of an equity transaction. Equity Ownership in America 69 . Note: Number of respondents varies. Multiple responses included.FIGURE 59 Equity Ownership Characteristics by Investment Decisionmaker Male is Sole Decisionmaker Median Household financial assets in equities Number of equities owned Number of equity transactions in 1998 Percent Own: Individual stock (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net) 2 1 Female is Sole Decisionmaker Co-decisionmakers $55.

Other includes employee stock ownership plans (ESOPs) and SEP-IRAs.000 $300.000 28 32 40 44 7 12 38 11 74 62 24 25 25 12 63 77 5 2 55 19 88 80 15 12 28 8 64 86 5 1 75 36 88 75 14 14 79 15 4 12 17 33 20 18 73 30 47 7 16 12 41 36 8 91 4 1 2 3 84 19 7 15 20 42 26 26 86 43 65 8 21 14 55 48 12 88 5 2 5 2 86 31 15 23 25 46 38 40 84 46 63 13 19 19 67 63 15 91 4 3 2 1 Refers to the household’s responding financial decisionmaker for investments.000 $42. money market deposit accounts.FIGURE 60 Characteristics of Equity Owners by Household Income1 Household Income $50. or federal government plan Other5 Have IRA (net)4 Traditional IRA Roth IRA Ethnic background:6 Caucasian African-American Asian Hispanic Other 1 2 3 4 5 6 $100. or certificates of deposit Bond investments (net)4 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage (net)4 Traditional defined-benefit pension plan 401(k) plan 403(b) plan State.000 $89. Percent of shareholders married or living with a partner.500 44 years $65. Includes assets in employer-sponsored retirement plans but excludes value of primary residence.000 48 years $125. Note: Number of respondents varies. Multiple responses included because Hispanics can be of any race.000 Median Age Household income Household financial assets2 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married Living with a partner Widowed College or postgraduate degree Completed graduate school Employed Spouse or partner employed3 Retired from lifetime occupation Spouse or partner retired from lifetime occupation3 Non-equity investments held:4 Savings accounts.000 to $99.999 Less than $50. Multiple responses included.000 or More 45 years $34. 70 Equity Ownership in America . local.

000 Median Household financial assets in equities Number of equities owned Number of equity transactions in 1998 Percent Own: Individual stock (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first equity purchase: Before 1990 1990 to 1995 1996 or later Source of first equity purchase: Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 $100.FIGURE 61 Equity Ownership Characteristics by Household Income Household Income $50. Note: Number of respondents varies.000 or More $20. Equity Ownership in America 71 .000 to $99.000 4 0 $200. Multiple responses included.000 3 1 $50.999 Less than $50.000 7 3 0 44 15 34 81 49 51 52 20 44 89 66 55 67 29 61 88 69 66 42 29 29 51 33 16 71 22 7 44 56 49 51 42 58 30 64 6 27 62 11 36 54 10 7 27 50 8 7 12 34 45 6 4 9 43 41 4 2 See text footnote 14 on page 8 for the definition of an equity transaction.

000 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married Living with a partner Widowed College or postgraduate degree Completed graduate school Employed Spouse or partner employed3 Retired from lifetime occupation Spouse or partner retired from lifetime occupation3 Non-equity investments held:4 Savings accounts. Note: Number of respondents varies.000 $10.000 $99. money market deposit accounts. local.000 $56. or federal government plan Other5 Have IRA (net)4 Traditional IRA Roth IRA Ethnic background:6 Caucasian African-American Asian Hispanic Other 1 2 3 4 5 6 25 25 51 54 10 2 39 10 90 82 7 11 26 18 56 66 4 5 49 13 88 82 13 9 31 14 55 72 3 5 60 28 82 77 21 14 41 11 48 78 5 9 71 36 70 54 37 26 80 14 3 12 9 30 11 8 77 25 60 7 16 16 30 24 7 86 6 2 5 3 85 10 3 8 15 37 22 20 85 35 67 7 18 13 49 45 9 90 4 1 4 3 83 24 9 18 26 42 34 33 83 45 59 10 18 15 63 56 15 92 3 3 3 1 85 39 22 29 28 50 46 56 76 40 48 10 17 15 70 67 16 94 2 2 <1 2 Refers to the household’s responding financial decisionmaker for investments.000 Median Age Household income Household financial assets2 $500. Multiple responses included.000 or More 35 years $40.999 Less than $25.000 48 years $70.000 to $100. Other includes employee stock ownership plans (ESOPs) and SEP-IRAs. Percent of shareholders married or living with a partner. 72 Equity Ownership in America .FIGURE 62 Characteristics of Equity Owners by Household Financial Assets1 Household Financial Assets $25. Multiple responses included because Hispanics can be of any race.999 or $499.000 $195. Includes assets in employer-sponsored retirement plans but excludes value of primary residence. or certificates of deposit Bond investments (net)4 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage (net)4 Traditional defined-benefit pension plan 401(k) plan 403(b) plan State.100 42 years $52.000 $840.000 56 years $100.

000 6 1 $437.FIGURE 63 Equity Ownership Characteristics by Household Financial Assets Household Financial Assets $25. Equity Ownership in America 73 .500 12 5 0 38 17 25 81 57 41 47 22 37 87 68 49 59 19 55 90 62 64 77 29 71 81 52 69 22 32 46 47 37 17 66 25 9 84 11 5 56 44 55 45 40 60 23 77 25 69 6 26 64 9 31 60 10 50 38 12 12 33 45 5 5 11 31 47 7 5 7 36 46 7 4 8 36 49 4 2 See text footnote 14 on page 8 for the definition of an equity transaction.999 Less than $25.000 to $100.000 or More $7.999 or $499.000 4 0 $104. Multiple responses included. Note: Number of respondents varies.000 Median Household financial assets in equities Number of equities owned Number of equity transactions in 1998 Percent Own: Individual stock (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first equity purchase: Before 1990 1990 to 1995 1996 or later Source of first equity purchase: Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 $500.000 2 1 $35.000 $99.

or certificates of deposit Bond investments (net)4 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored plan coverage (net)4 Traditional defined-benefit pension plan 401(k) plan 403(b) plan State.000 61 years $53. Multiple responses included because Hispanics can be of any race. Multiple responses included. or federal government plan Other5 Have IRA (net)4 Traditional IRA Roth IRA Ethnic background:6 Caucasian African-American Asian Hispanic Other 1 2 3 4 5 6 29 years $47. Includes assets in employer-sponsored retirement plans but excludes value of primary residence. Note: Number of respondents varies.000 44 years $62. 74 Equity Ownership in America .FIGURE 64 Characteristics of Equity Owners by Generation1 Baby Boom Generation (ages 36 to 54) Silent Generation (ages 55 to 74) GI Generation (ages 75 or older) Generation X (ages 19 to 35) Median Age Household income Household financial assets2 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married Living with a partner Widowed College or postgraduate degree Completed graduate school Employed Spouse or partner employed3 Retired from lifetime occupation Spouse or partner retired from lifetime occupation3 Non-equity investments held:4 Savings accounts.000 $200. money market deposit accounts.500 $88. Other includes employee stock ownership plans (ESOPs) and SEP-IRAs.000 $200.000 78 years $30. Percent of shareholders married or living with a partner.000 $25.000 28 15 57 58 13 1 53 10 95 85 1 2 25 17 58 72 4 1 55 21 94 85 5 6 25 24 51 69 2 13 48 22 58 54 49 40 32 40 28 47 0 42 51 15 12 15 90 81 82 14 4 11 9 33 17 17 83 28 69 6 16 15 37 27 12 84 7 3 6 2 84 21 8 16 20 42 26 26 86 41 67 10 20 15 53 47 13 88 5 2 4 3 82 24 11 19 30 41 32 34 73 41 39 8 17 10 67 64 10 96 2 1 1 1 86 44 25 30 35 35 30 24 49 37 10 4 11 3 39 39 1 97 2 2 1 0 Refers to the household’s responding financial decisionmaker for investments. local.

Note: Number of respondents varies.000 4 0 $85.000 5 0 $74.000 5 0 45 21 35 83 64 45 52 23 43 88 67 57 58 17 51 84 47 62 63 6 59 80 12 72 18 43 39 57 28 15 73 18 9 72 15 13 54 46 50 50 33 77 7 93 25 65 10 27 63 10 38 52 10 49 43 8 15 37 39 4 4 9 36 46 5 4 4 21 57 9 9 4 7 55 18 16 See text footnote 14 on page 8 for the definition of an equity transaction. Equity Ownership in America 75 .FIGURE 65 Equity Ownership Characteristics by Generation Baby Boom Generation (ages 36 to 54) Silent Generation (ages 55 to 74) GI Generation (ages 75 or older) Generation X (ages 19 to 35) Median Household financial assets in equities Number of equities owned Number of equity transactions in 19981 Percent Own: Individual stock (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first equity purchase: Before 1990 1990 to 1995 1996 or later Source of first equity purchase: Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 $20. Multiple responses included.000 3 0 $50.

000 $90. Includes assets in employer-sponsored retirement plans but excludes value of primary residence. Multiple responses included.000 45 years $60.000 47 years $55. 76 Equity Ownership in America . money market deposit accounts. Percent of shareholders married or living with a partner.FIGURE 66 Characteristics of Equity Owners by Region1 Northeast Median Age Household income Household financial assets2 Midwest South West 48 years $60. Other includes employee stock ownership plans (ESOPs) and SEP-IRAs.000 47 years $56. or certificates of deposit Bond investments (net)4 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage (net)4 Traditional defined-benefit pension plan 401(k) plan 403(b) plan State.000 $70. local.000 $107.000 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married Living with a partner Widowed College or postgraduate degree Completed graduate school Employed Spouse or partner employed3 Retired from lifetime occupation Spouse or partner retired from lifetime occupation3 Non-equity investments held:4 Savings accounts. Multiple responses included because Hispanics can be of any race.000 $80. Note: Number of respondents varies. or federal government plan Other5 Have IRA (net)4 Traditional IRA Roth IRA Ethnic background:6 Caucasian African-American Asian Hispanic Other 1 2 3 4 5 6 24 24 52 65 8 8 55 21 81 78 20 16 25 21 54 69 4 6 47 16 81 75 20 13 26 19 55 69 4 7 53 20 77 70 24 21 28 17 55 65 6 6 57 19 81 73 20 17 84 23 10 17 20 39 25 25 84 48 57 10 14 13 53 47 12 93 4 1 3 1 84 20 7 17 24 39 26 23 80 42 58 10 14 13 55 49 11 93 3 1 1 2 83 23 11 16 21 39 26 29 77 35 55 7 21 14 53 47 10 87 9 1 2 2 81 21 8 16 21 41 29 28 80 34 56 7 20 11 50 45 12 88 2 3 8 3 Refers to the household’s responding financial decisionmaker for investments.

Multiple responses included.FIGURE 67 Equity Ownership Characteristics by Region Northeast Median Household financial assets in equities Number of equities owned Number of equity transactions in 1998 Percent Own: Individual stock (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net) 2 1 Midwest South West $50.500 4 0 58 23 51 82 57 52 50 20 42 87 60 60 52 18 44 86 58 57 57 22 46 84 58 56 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first equity purchase: Before 1990 1990 to 1995 1996 or later Source of first equity purchase: Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 58 28 14 54 26 20 55 29 17 51 28 21 62 38 44 56 45 55 45 55 36 54 10 27 62 8 30 59 11 30 59 11 10 27 50 7 6 7 34 47 6 6 8 29 48 8 7 11 32 47 5 5 See text footnote 14 on page 8 for the definition of an equity transaction.000 5 0 $49. Equity Ownership in America 77 .000 4 0 $50. Note: Number of respondents varies.000 4 0 $45.

APPENDIX D Detailed Tabulations for Individual Stock Owners by Key Demographic Variables Equity Ownership in America 79 .

or federal government plan Other5 Have IRA (net)4 Traditional IRA Roth IRA Ethnic background:6 Caucasian African-American Asian Hispanic Other 1 2 3 4 5 6 Female is Sole Decisionmaker Co-decisionmakers 47 years $62.000 47 years $70.000 $100. Note: Number of respondents varies. Multiple responses included because Hispanics can be of any race.000 55 years $45. Other includes employee stock ownership plans (ESOPs) and SEP-IRAs.FIGURE 68 Characteristics of Individual Stock Owners by Investment Decisionmaker1 Male is Sole Decisionmaker Median Age Household income Household financial assets2 Percent Married Living with a partner Widowed College or postgraduate degree Completed graduate school Employed Spouse or partner employed3 Retired from lifetime occupation Spouse or partner retired from lifetime occupation3 Non-equity investments held:4 Savings accounts.000 52 4 7 64 23 81 59 25 21 22 7 28 52 18 60 85 34 21 92 5 1 57 22 80 72 21 20 81 25 14 17 18 31 37 30 77 41 56 5 10 14 58 51 14 92 3 2 3 3 85 26 11 20 31 32 32 28 71 37 42 11 11 15 56 52 11 91 3 1 2 4 85 24 11 17 23 29 40 33 82 43 59 9 20 16 58 52 12 91 4 2 3 3 Refers to the household’s responding financial decisionmaker for investments. 80 Equity Ownership in America . Multiple responses included.500 $133. Includes assets in employer-sponsored retirement plans but excludes value of primary residence.000 $120. money market deposit accounts. or certificates of deposit Bond investments (net)4 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage (net)4 Traditional defined-benefit pension plan 401(k) plan 403(b) plan State. local. Percent of shareholders married or living with a partner.

Equity Ownership in America 81 . Note: Number of respondents varies.FIGURE 69 Individual Stock Ownership Characteristics by Investment Decisionmaker Male is Sole Decisionmaker Median Household financial assets in individual stock Number of individual stocks owned Number of individual stock transactions in 1998 Percent Own: Individual stock (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first individual stock purchase: Before 1990 1990 to 1995 1996 or later Source of first individual stock purchase: Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 Female is Sole Decisionmaker Co-decisionmakers $40.000 4 1 $29.500 3 0 $30.000 3 0 1 100 40 87 67 48 53 100 27 87 71 36 56 100 41 84 75 53 55 60 26 14 59 25 16 59 22 19 26 74 31 69 36 64 62 19 19 65 18 17 56 24 20 14 34 42 5 5 6 25 55 10 4 7 33 46 7 7 See text footnote 14 on page 8 for the definition of an individual stock transaction. Multiple responses included.

Includes assets in employer-sponsored retirement plans but excludes value of primary residence.000 Median Age Household income Household financial assets2 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married Living with a partner Widowed College or postgraduate degree Completed graduate school Employed Spouse or partner employed3 Retired from lifetime occupation Spouse or partner retired from lifetime occupation3 Non-equity investments held:4 Savings accounts. money market deposit accounts.000 45 years $65. Other includes employee stock ownership plans (ESOPs) and SEP-IRAs.FIGURE 70 Characteristics of Individual Stock Owners by Household Income1 Household Income $50.000 49 years $135. Multiple responses included because Hispanics can be of any race. local.000 to $99.000 $107.000 or More 46 years $35.000 $55.999 Less than $50. or certificates of deposit Bond investments (net)4 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage (net)4 Traditional defined-benefit pension plan 401(k) plan 403(b) plan State. 82 Equity Ownership in America .000 31 29 40 46 8 14 41 11 70 58 29 27 28 12 60 75 4 4 62 22 87 77 16 15 31 8 61 85 7 1 75 38 86 71 13 16 79 16 6 11 16 25 24 24 68 34 43 5 15 12 40 36 6 90 3 1 2 4 82 21 10 15 19 42 27 27 85 43 65 8 19 17 59 52 15 91 4 1 3 2 86 31 18 21 26 44 39 42 83 45 65 12 15 21 71 67 16 92 3 3 1 2 Refers to the household’s responding financial decisionmaker for investments. Note: Number of respondents varies.000 $320. or federal government plan Other5 Have IRA (net)4 Traditional IRA Roth IRA Ethnic background:6 Caucasian African-American Asian Hispanic Other 1 2 3 4 5 6 $100. Multiple responses included. Percent of shareholders married or living with a partner.

FIGURE 71 Individual Stock Ownership Characteristics by Household Income Household Income $50.000 to $99. Note: Number of respondents varies. Equity Ownership in America 83 . Multiple responses included.000 Median Household financial assets in individual stock Number of individual stocks owned Number of individual stock transactions in 1998 Percent Own: Individual stock (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first individual stock purchase: Before 1990 1990 to 1995 1996 or later Source of first individual stock purchase: Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 $100.500 2 1 $28.000 or More $12.999 Less than $50.700 5 3 0 100 35 79 55 28 43 100 40 86 79 59 56 100 43 91 83 64 64 52 25 23 54 29 17 68 19 13 30 70 37 63 34 66 72 14 14 53 26 21 54 31 15 8 28 47 8 9 12 36 44 6 2 10 43 42 4 1 See text footnote 14 on page 8 for the definition of an individual stock transaction.500 3 1 $99.

Multiple responses included because Hispanics can be of any race.000 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married Living with a partner Widowed College or postgraduate degree Completed graduate school Employed Spouse or partner employed3 Retired from lifetime occupation Spouse or partner retired from lifetime occupation3 Non-equity investments held:4 Savings accounts.000 to $100. Percent of shareholders married or living with a partner.000 $55. or federal government plan Other5 Have IRA (net)4 Traditional IRA Roth IRA Ethnic background:6 Caucasian African-American Asian Hispanic Other 1 2 3 4 5 6 24 22 54 55 11 3 45 9 88 78 10 19 30 15 55 70 4 5 55 15 91 80 12 9 31 17 52 70 3 5 67 30 79 75 20 13 43 11 46 77 6 9 70 36 66 49 40 31 87 11 3 9 12 24 14 8 69 26 55 5 14 16 34 28 7 85 4 3 7 4 84 10 3 8 14 36 24 23 86 42 69 7 15 17 50 46 11 91 5 0 1 4 80 24 11 16 25 41 38 34 84 47 60 9 17 18 67 59 17 92 3 2 2 2 84 42 26 30 26 47 44 59 71 36 46 8 16 15 71 69 14 96 1 2 0 2 Refers to the household’s responding financial decisionmaker for investments.500 39 years $60.000 57 years $100.000 $10. Includes assets in employer-sponsored retirement plans but excludes value of primary residence. money market deposit accounts. or certificates of deposit Bond investments (net)4 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage (net)4 Traditional defined-benefit pension plan 401(k) plan 403(b) plan State.000 48 years $70.999 Less than $25. local. Note: Number of respondents varies.000 $99. 84 Equity Ownership in America .FIGURE 72 Characteristics of Individual Stock Owners by Household Financial Assets1 Household Financial Assets $25.000 Median Age Household income Household financial assets2 $500.999 or $499. Other includes employee stock ownership plans (ESOPs) and SEP-IRAs.000 $200. Multiple responses included.000 or More 35 years $40.000 $850.

000 to $100.000 Median Household financial assets in individual stock Number of individual stocks owned Number of individual stock transactions in 1998 Percent Own: Individual stock (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first individual stock purchase: Before 1990 1990 to 1995 1996 or later Source of first individual stock purchase: Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 $500. Multiple responses included.400 1 1 $18. Equity Ownership in America 85 . Note: Number of respondents varies.000 8 4 0 100 46 68 46 33 32 100 47 79 71 57 47 100 33 94 83 56 65 100 38 91 75 47 65 30 28 42 47 36 17 64 23 13 79 13 8 46 54 42 58 31 69 21 79 70 13 17 57 22 21 52 31 17 64 21 15 13 37 40 3 7 12 32 44 7 5 7 39 44 7 3 9 36 47 6 2 See text footnote 14 on page 8 for the definition of an individual stock transaction.000 $99.999 or $499.999 Less than $25.000 4 1 $298.000 or More $4.500 2 0 $60.FIGURE 73 Individual Stock Ownership Characteristics by Household Financial Assets Household Financial Assets $25.

000 $300. Note: Number of respondents varies. or certificates of deposit Bond investments (net)4 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage (net)4 Traditional defined-benefit pension plan 401(k) plan 403(b) plan State. Includes assets in employer-sponsored retirement plans but excludes value of primary residence. Multiple responses included.FIGURE 74 Characteristics of Individual Stock Owners by Generation1 Baby Boom Generation (ages 36 to 54) Silent Generation (ages 55 to 74) GI Generation (ages 75 or older) Generation X (ages 19 to 35) Median Age Household income Household financial assets2 29 years $50. local. Multiple responses included because Hispanics can be of any race. Percent of shareholders married or living with a partner.000 $357.000 $120.000 44 years $70.000 $32. Other includes employee stock ownership plans (ESOPs) and SEP-IRAs.000 79 years $34. 86 Equity Ownership in America . money market deposit accounts. or federal government plan Other5 Have IRA (net)4 Traditional IRA Roth IRA Ethnic background:6 Caucasian African-American Asian Hispanic Other 1 2 3 4 5 6 31 10 59 59 13 1 59 11 95 81 2 3 29 13 58 74 5 1 63 24 93 83 6 7 27 22 50 70 2 14 51 23 56 53 50 40 30 34 36 55 0 34 56 19 15 20 90 77 81 13 5 9 12 30 19 20 84 31 71 3 13 19 41 32 13 85 6 3 4 2 85 24 11 17 19 40 31 32 85 45 68 11 18 19 58 51 15 89 4 2 4 4 82 27 14 20 30 40 33 39 71 42 38 6 16 12 69 66 10 96 2 1 1 1 87 44 31 25 37 25 31 26 49 39 13 5 13 2 42 42 1 97 0 3 0 0 Refers to the household’s responding financial decisionmaker for investments.000 61 years $60.000 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married Living with a partner Widowed College or postgraduate degree Completed graduate school Employed Spouse or partner employed3 Retired from lifetime occupation Spouse or partner retired from lifetime occupation3 Non-equity investments held:4 Savings accounts.

Note: Number of respondents varies. Equity Ownership in America 87 .500 5 0 100 48 78 61 51 42 100 44 83 77 60 56 100 29 90 71 38 59 100 10 96 68 6 63 21 45 34 59 23 18 78 15 7 85 6 9 39 61 39 61 24 76 2 98 57 20 23 53 27 20 66 17 17 76 12 12 20 42 30 4 4 10 38 45 4 3 4 22 56 9 9 2 8 54 18 18 See text footnote 14 on page 8 for the definition of an individual stock transaction.FIGURE 75 Individual Stock Ownership Characteristics by Generation Baby Boom Generation (ages 36 to 54) Silent Generation (ages 55 to 74) GI Generation (ages 75 or older) Generation X (ages 19 to 35) Median Household financial assets in individual stock Number of individual stocks owned Number of individual stock transactions in 19981 Percent Own: Individual stock (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first individual stock purchase: Before 1990 1990 to 1995 1996 or later Source of first individual stock purchase: Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 $11.250 2 0 $30.000 3 1 $60. Multiple responses included.000 4 0 $87.

Includes assets in employer-sponsored retirement plans but excludes value of primary residence. money market deposit accounts.500 49 years $62.000 49 years $62.500 $80. 88 Equity Ownership in America . Note: Number of respondents varies. Multiple responses included. Other includes employee stock ownership plans (ESOPs) and SEP-IRAs. Multiple responses included because Hispanics can be of any race.000 45 years $62. or federal government plan Other5 Have IRA (net)4 Traditional IRA Roth IRA Ethnic background:6 Caucasian African-American Asian Hispanic Other 1 2 3 4 5 6 84 28 15 18 20 39 29 27 51 56 9 11 15 58 52 13 94 3 2 1 2 84 21 9 16 23 36 30 30 78 45 56 10 13 16 61 55 13 94 2 1 0 3 85 28 16 19 25 40 31 34 74 37 53 6 20 17 57 52 10 90 6 0 2 2 81 20 8 16 22 36 31 34 81 36 57 7 18 14 53 49 12 87 2 4 7 3 Have employer-sponsored retirement plan coverage (net)4 83 Refers to the household’s responding financial decisionmaker for investments. or certificates of deposit Bond investments (net)4 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Traditional defined-benefit pension plan 401(k) plan 403(b) plan State.500 $137.500 $125.500 $126. Percent of shareholders married or living with a partner. local.000 27 20 52 66 7 10 59 23 79 76 20 17 30 16 53 72 4 7 57 22 79 72 25 16 27 16 57 71 4 8 58 22 70 67 29 24 31 16 53 65 6 5 60 21 82 68 21 21 Retired from lifetime occupation Spouse or partner retired from lifetime occupation3 Non-equity investments held:4 Savings accounts.FIGURE 76 Characteristics of Individual Stock Owners by Region1 Northeast Median Age Household income Household financial assets2 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married Living with a partner Widowed College or postgraduate degree Completed graduate school Employed Spouse or partner employed 3 Midwest South West 49 years $62.

100 3 1 100 39 88 69 45 52 100 40 86 73 52 59 100 35 86 73 48 55 100 40 82 71 51 54 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first individual stock purchase: Before 1990 1990 to 1995 1996 or later Source of first individual stock purchase: Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 63 21 16 64 23 13 59 27 14 53 23 24 29 71 35 65 30 70 34 66 63 19 18 60 24 16 59 19 22 55 25 20 9 30 47 8 6 8 34 46 6 6 8 30 49 7 6 12 34 43 5 6 See text footnote 14 on page 8 for the definition of an individual stock transaction.000 3 0 $25. Multiple responses included. Note: Number of respondents varies.800 3 0 $30. Equity Ownership in America 89 .000 4 1 $32.FIGURE 77 Individual Stock Ownership Characteristics by Region Northeast Median Household financial assets in individual stock Number of individual stocks owned Number of individual stock transactions in 1998 Percent Own: Individual stock (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net) 2 1 Midwest South West $30.

APPENDIX E Detailed Tabulations for Stock Mutual Fund Shareholders by Key Demographic Variables Equity Ownership in America 91 .

000 51 4 5 61 24 83 59 21 19 20 6 23 49 16 70 80 28 24 93 5 1 51 18 84 78 17 15 79 24 11 18 18 29 47 27 79 36 57 6 13 12 57 51 14 91 3 2 3 3 85 26 9 22 28 29 42 21 78 34 50 10 15 14 50 46 11 88 8 0 2 2 84 22 8 18 22 29 44 29 85 43 63 10 22 13 57 51 12 90 5 2 4 2 Refers to the household’s responding financial decisionmaker for investments. money market deposit accounts. local. Multiple responses included. Includes assets in employer-sponsored retirement plans but excludes value of primary residence. Other includes employee stock ownership plans (ESOPs) and SEP-IRAs.000 $60.000 $90.000 46 years $65.000 50 years $38. 92 Equity Ownership in America . Multiple responses included because Hispanics can be of any race. Percent of shareholders married or living with a partner. Note: Number of respondents varies.000 $100.FIGURE 78 Characteristics of Stock Mutual Fund Shareholders by Investment Decisionmaker1 Male is Sole Decisionmaker Median Age Household income Household financial assets2 Percent Married Living with a partner Widowed College or postgraduate degree Completed graduate school Employed Spouse or partner employed3 Retired from lifetime occupation Spouse or partner retired from lifetime occupation3 Non-equity investments held:4 Savings accounts. or federal government plan Other5 Have IRA (net)4 Traditional IRA Roth IRA Ethnic background:6 Caucasian African-American Asian Hispanic Other 1 2 3 4 5 6 Female is Sole Decisionmaker Co-decisionmakers 46 years $59. or certificates of deposit Bond investments (net)4 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage (net)4 Traditional defined-benefit pension plan 401(k) plan 403(b) plan State.

000 4 0 0 49 19 43 100 69 70 38 10 34 100 58 69 46 17 40 100 72 65 48 32 20 40 30 30 50 33 17 40 60 44 56 50 50 20 66 14 17 74 9 18 70 12 14 35 44 4 3 6 26 56 7 5 8 33 48 6 5 See text footnote 14 on page 8 for the definition of a stock mutual fund transaction. Note: Number of respondents varies.FIGURE 79 Stock Mutual Fund Ownership Characteristics by Investment Decisionmaker Male is Sole Decisionmaker Median Household financial assets in stock mutual funds Number of stock mutual funds owned Number of stock mutual fund transactions in 1998 Percent Own: Individual stock (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first stock mutual fund purchase: Before 1990 1990 to 1995 1996 or later Source of first stock mutual fund purchase: Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 Female is Sole Decisionmaker Co-decisionmakers $40.000 3 0 $38.000 4 1 $30. Equity Ownership in America 93 . Multiple responses included.

94 Equity Ownership in America . money market deposit accounts.000 $42.000 $300. or certificates of deposit Bond investments (net)4 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage (net)4 Traditional defined-benefit pension plan 401(k) plan 403(b) plan 457 plan Other5 Have IRA (net)4 Traditional IRA Roth IRA Ethnic background:6 Caucasian African-American Asian Hispanic Other 1 2 3 4 5 6 $100.500 44 years $65.000 $90. Multiple responses included because Hispanics can be of any race. Percent of shareholders married or living with a partner. Other includes employee stock ownership plans (ESOPs) and SEP-IRAs.FIGURE 80 Characteristics of Stock Mutual Fund Shareholders by Household Income1 Household Income $50. Includes assets in employer-sponsored retirement plans but excludes value of primary residence. Note: Number of respondents varies.999 Less than $50.000 Median Age Household income Household financial assets2 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married Living with a partner Widowed College or postgraduate degree Completed graduate school Employed Spouse or partner employed3 Retired from lifetime occupation Spouse or partner retired from lifetime occupation3 Non-equity investments held:4 Savings accounts.000 to $99.000 48 years $125.000 or More 46 years $34.000 26 33 40 44 6 11 38 11 75 63 23 25 25 12 63 78 5 2 55 19 88 80 16 12 27 7 66 88 5 1 76 36 88 76 13 13 80 17 4 14 19 22 39 18 76 29 48 8 17 11 45 39 10 91 4 1 2 2 83 20 7 16 20 27 46 26 88 45 67 8 22 13 56 50 13 88 5 2 5 3 86 32 15 24 25 41 49 40 86 47 65 14 19 20 69 65 17 91 4 3 3 1 Refers to the household’s responding financial decisionmaker for investments. Multiple responses included.

000 or More $20. Note: Number of respondents varies.000 Median Household financial assets in stock mutual funds Number of stock mutual funds owned Number of stock mutual fund transactions in 19981 Percent Own: Individual stock (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first stock mutual fund purchase: Before 1990 1990 to 1995 1996 or later Source of first stock mutual fund purchase: Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 $100.000 3 0 $40. Multiple responses included. Equity Ownership in America 95 .999 Less than $50.000 6 1 30 8 25 100 61 64 34 33 33 46 54 13 80 7 7 27 53 8 5 46 17 41 100 74 62 44 38 18 50 50 18 70 12 12 34 46 5 3 63 26 58 100 78 74 63 29 8 44 56 27 62 11 9 45 40 4 2 See text footnote 14 on page 8 for the definition of a stock mutual fund transaction.000 3 0 $101.000 to $99.FIGURE 81 Stock Mutual Fund Ownership Characteristics by Household Income Household Income $50.

000 or More 35 years $40. or certificates of deposit Bond investments (net)4 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage (net)4 Traditional defined-benefit pension plan 401(k) plan 403(b) plan State.000 $850. money market deposit accounts. or federal government plan Other5 Have IRA (net)4 Traditional IRA Roth IRA Ethnic background:6 Caucasian African-American Asian Hispanic Other 1 2 3 4 5 6 25 26 49 54 9 2 38 11 90 85 6 7 25 17 57 67 3 5 50 13 88 82 12 10 29 14 57 74 3 4 60 27 82 78 21 14 39 11 49 81 5 7 72 35 73 55 33 25 79 17 4 14 9 35 12 9 80 25 63 7 17 16 33 27 8 87 7 2 4 3 85 11 4 9 16 41 24 19 86 36 68 8 18 13 51 46 10 90 4 1 5 3 83 25 9 19 26 46 35 33 84 45 60 11 18 16 64 57 16 91 3 2 3 1 86 42 22 33 32 60 51 55 79 42 54 11 17 15 75 71 19 93 3 3 <1 1 Refers to the household’s responding financial decisionmaker for investments.999 or $499. Percent of shareholders married or living with a partner.000 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married Living with a partner Widowed College or postgraduate degree Completed graduate school Employed Spouse or partner employed3 Retired from lifetime occupation Spouse or partner retired from lifetime occupation3 Non-equity investments held:4 Savings accounts. 96 Equity Ownership in America .000 Median Age Household income Household financial assets2 $500. Note: Number of respondents varies.000 $99.FIGURE 82 Characteristics of Stock Mutual Fund Shareholders by Household Financial Assets1 Household Financial Assets $25.999 Less than $25.000 to $100. Multiple responses included because Hispanics can be of any race.000 $12. Other includes employee stock ownership plans (ESOPs) and SEP-IRAs.000 $195.000 53 years $115. local.000 $56.000 48 years $70.000 42 years $55. Multiple responses included. Includes assets in employer-sponsored retirement plans but excludes value of primary residence.

FIGURE 83

Stock Mutual Fund Ownership Characteristics by Household Financial Assets
Household Financial Assets $25,000 to $100,000 $99,999 or $499,999

Less than $25,000 Median Household financial assets in stock mutual funds Number of stock mutual funds owned Number of stock mutual fund transactions in 19981 Percent Own: Individual stock (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first stock mutual fund purchase: Before 1990 1990 to 1995 1996 or later Source of first stock mutual fund purchase: Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk
1 2

$500,000 or More

$7,500 2 0

$27,900 3 0

$78,000 4 0

$203,000 7 1

21 8 16 100 72 51 15 36 49 60 40 6 86 8 13 36 44 5 2

38 15 32 100 78 57 39 41 20 55 45 15 74 11 11 30 48 6 5

54 18 51 100 69 72 60 30 10 42 58 23 67 10 8 37 46 6 2

74 28 66 100 65 86 77 15 8 29 71 37 48 15 6 38 49 4 3

See text footnote 14 on page 8 for the definition of a stock mutual fund transaction. Multiple responses included.

Note: Number of respondents varies.

Equity Ownership in America

97

FIGURE 84

Characteristics of Stock Mutual Fund Shareholders by Generation1
Baby Boom Generation (ages 36 to 54) Silent Generation (ages 55 to 74) GI Generation (ages 75 or older)

Generation X (ages 19 to 35) Median Age Household income Household financial assets2

29 years $50,000 $29,000

44 years $64,000 $90,000

61 years $58,000 $210,000

78 years $30,000 $175,000

Percent Household investment decisionmaker: Male Female Co-decisionmakers Married Living with a partner Widowed College or postgraduate degree Completed graduate school Employed Spouse or partner employed3 Retired from lifetime occupation Spouse or partner retired from lifetime occupation3 Non-equity investments held:4 Savings accounts, money market deposit accounts, or certificates of deposit Bond investments (net)4 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage (net)4 Traditional defined-benefit pension plan 401(k) plan 403(b) plan State, local, or federal government plan Other5 Have IRA (net)4 Traditional IRA Roth IRA Ethnic background:6 Caucasian African-American Asian Hispanic Other
1 2 3 4 5 6

28 16 56 59 11 1 54 11 96 85 1 1

24 17 59 72 4 1 56 21 95 86 4 5

23 23 53 71 2 12 48 23 58 54 49 38

30 42 29 47 0 43 51 14 13 14 88 79

83 16 4 12 10 37 20 16 86 30 70 7 17 15 41 29 14 84 8 3 6 2

84 22 8 17 20 45 28 26 88 42 69 10 21 15 55 49 14 88 5 1 4 2

83 27 11 22 32 48 35 35 74 41 40 9 17 10 70 67 11 95 3 1 2 1

86 47 24 34 37 44 33 22 49 38 10 4 11 4 42 42 1 96 2 2 1 0

Refers to the household’s responding financial decisionmaker for investments. Includes assets in employer-sponsored retirement plans but excludes value of primary residence. Percent of shareholders married or living with a partner. Multiple responses included. Other includes employee stock ownership plans (ESOPs) and SEP-IRAs. Multiple responses included because Hispanics can be of any race.

Note: Number of respondents varies.

98

Equity Ownership in America

FIGURE 85

Stock Mutual Fund Ownership Characteristics by Generation
Baby Boom Generation (ages 36 to 54) Silent Generation (ages 55 to 74) GI Generation (ages 75 or older)

Generation X (ages 19 to 35) Median Household financial assets in stock mutual funds Number of stock mutual funds owned Number of stock mutual fund transactions in 19981 Percent Own: Individual stock (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first stock mutual fund purchase: Before 1990 1990 to 1995 1996 or later Source of first stock mutual fund purchase: Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk
1 2

$20,000 3 0

$40,000 4 0

$60,000 3 0

$35,000 2 0

33 14 28 100 77 55 14 45 41 56 44 9 79 12 16 39 39 3 3

45 18 40 100 76 65 51 32 17 51 49 17 72 11 9 37 46 5 3

50 14 45 100 56 74 64 23 13 36 64 25 63 12 5 22 57 8 8

54 7 49 100 15 92 61 23 16 10 90 32 57 11 5 8 58 17 12

See text footnote 14 on page 8 for the definition of a stock mutual fund transaction. Multiple responses included.

Note: Number of respondents varies.

Equity Ownership in America

99

local. Note: Number of respondents varies.000 $90.000 $107.000 $77. Other includes employee stock ownership plans (ESOPs) and SEP-IRAs. Multiple responses included because Hispanics can be of any race. or certificates of deposit Bond investments (net)4 Individual bonds Bond mutual funds Fixed or variable annuities Hybrid mutual funds Money market mutual funds Investment real estate Have employer-sponsored retirement plan coverage(net)4 Traditional defined-benefit pension plan 401(k) plan 403(b) plan State.000 45 years $63.500 23 24 53 66 8 7 56 22 82 78 20 16 23 22 55 69 4 6 46 16 82 76 20 13 25 20 55 70 4 6 54 20 79 71 22 19 27 16 57 66 6 6 58 19 81 75 19 15 Retired from lifetime occupation Spouse or partner retired from lifetime occupation3 Non-equity investments held:4 Savings accounts.FIGURE 86 Characteristics of Stock Mutual Fund Shareholders by Region1 Northeast Median Age Household income Household financial assets2 Percent Household investment decisionmaker: Male Female Co-decisionmakers Married Living with a partner Widowed College or postgraduate degree Completed graduate school Employed Spouse or partner employed 3 Midwest South West 48 years $62.000 47 years $60.000 $85. money market deposit accounts. or federal government plan Other5 Have IRA (net)4 Traditional IRA Roth IRA Ethnic background:6 Caucasian African-American Asian Hispanic Other 1 2 3 4 5 6 84 25 11 19 21 44 27 26 86 48 59 11 15 12 55 50 13 93 4 1 3 1 84 22 6 19 24 43 29 23 83 44 60 11 14 13 57 51 12 93 3 1 1 2 83 24 11 18 21 43 27 30 79 36 57 7 22 14 56 49 11 87 9 1 2 2 82 23 8 19 22 48 32 28 82 34 59 7 21 12 55 49 14 88 2 3 8 3 Refers to the household’s responding financial decisionmaker for investments. Multiple responses included. Percent of shareholders married or living with a partner. Includes assets in employer-sponsored retirement plans but excludes value of primary residence.000 47 years $56. 100 Equity Ownership in America .

000 3 0 $35.FIGURE 87 Stock Mutual Fund Ownership Characteristics by Region Northeast Median Household financial assets in stock mutual funds Number of stock mutual funds owned Number of stock mutual fund transactions in 1998 Percent Own: Individual stock (net)2 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Stock mutual funds (net) 2 1 Midwest South West $38.100 3 0 49 18 44 100 70 63 42 15 27 100 69 69 44 15 39 100 67 66 48 18 41 100 69 67 Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Year of first stock mutual fund purchase: Before 1990 1990 to 1995 1996 or later Source of first stock mutual fund purchase: Inside employer-sponsored retirement plans Outside employer-sponsored retirement plans Type of equity first purchased: Individual stock only Stock mutual funds only Both individual stock and stock mutual funds Willing to take: Substantial risk for substantial gain Above-average risk for above-average gain Average risk for average gain Below-average risk for below-average gain Unwilling to take any risk 1 2 53 30 17 47 31 22 48 32 20 44 34 22 46 54 45 55 47 53 47 53 22 66 12 18 72 10 18 69 13 17 70 13 10 28 50 6 6 7 34 48 6 5 8 29 50 7 6 10 35 46 5 4 See text footnote 14 on page 8 for the definition of a stock mutual fund transaction.000 3 0 $36. Multiple responses included. Equity Ownership in America 101 .000 4 0 $38. Note: Number of respondents varies.

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