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Young Americans Still Wary of Investing in Stocks

Young Americans Still Wary of Investing in Stocks

by Jim Norman

Story Highlights

  • Only 37% of those younger than 35 invest in stock market
  • A majority of those under 35 had stocks before 2008 market crash
  • Middle-income young Americans much more leery of market now

WASHINGTON, D.C. -- A decade after stockholders lost trillions of dollars in the crash of 2008, younger Americans are still leery of investing their money in stocks. Though the stock market has climbed far above pre-crash levels, the combined percentage of adults younger than 35 with money in the stock market in 2017 and 2018 stands at 37%, down from 52% for people in that age range in the two years (2006-07) leading up to the crash.

A look at combined two-year averages from 2001 through this year, which provide large enough samples for meaningful analysis, shows the toll that the crash took on younger Americans' confidence in stocks. The percentage owning stocks, which was already dropping in the years before the crash, reached a low of 33% in 2013-14 before rebounding somewhat in recent years. Over the same period, stock ownership among those 35 and older has never fallen below 58% in the two-year averages, and stands at 61% for the past two years.

Line graph: Americans younger than 35 who have stock market investments. 55% did in 2001-02 vs. 37% in 2017-18.

Overall, an average of 52% of those younger than 35 said they owned stocks in Gallup's annual Economy and Personal Finance Surveys for the seven years (2001-07) leading up to the crash. The average has dropped to 38% for the 11 years that followed (2008-18). Among those 35 and older, the pre-crash average was 66%, and the post-crash average is 61%.

Younger Americans owning stocks in the first few years of this century did so against the background of a 1990s stock boom that saw the Dow Jones industrial average more than quadruple in value. Despite some market turbulence over the next few years, the percentage of those under 35 with stocks dropped only moderately. However, after the crash of 2008, when the Dow Jones fell more than 50% from the end of 2007 to mid-March 2009, the ranks of those under 35 owning stock shrank steadily for the next several years. After growing to 43% in 2015-16, the past two years have seen a drop to 37% as the market showed strong growth but considerable volatility -- including some major declines this year.


Stock Ownership Has Fallen Most Among Middle-Income Younger Americans

For those aged 18 to 34, the drop in stock ownership from before the 2008 crash to today does not vary greatly by gender or education. Differences are more pronounced by income, with the most significant changes occurring among those in the middle-income bracket -- those with annual household incomes of at least $30,000 but less than $75,000.

Middle-Income Young Americans Less Invested in Stocks Post-Crash
Percentage of Americans 18 to 34 years old who own stocks, either personally or jointly with a spouse
2001-2007 2008-2018 Change
% % pct. pts.
All Americans 52 38 -14
Annual household income
Less than $30,000 25 18 -7
$30,000-$74,999 62 41 -21
$75,000 and above 78 66 -12
Male 55 41 -14
Female 49 36 -13
No college 36 22 -14
Some college 52 37 -15
College graduate 74 64 -10
Postgraduate work 80 69 -11

Safe Investments Hold Special Appeal to Young Americans

On average, about a fourth (26%) of younger Americans in Gallup's 2017 and 2018 surveys have said the stock market is the best of five possible long-term investments -- the same percentage as older Americans. Those 18 to 34 are much more likely than are those 35 and older to see savings accounts and CDs as the best choice, while older Americans are more likely to favor gold.

Stocks Rank Second as Best Long-Term Investment
Which of the following do you think is the best long-term investment -- bonds, real estate, savings accounts or CDs, stocks or mutual funds, or gold?
18 to 34 35 and older
% %
Real estate 32 35
Stocks, mutual funds 26 26
Savings accounts, CDs 21 11
Gold 11 20
Bonds 7 5
Gallup polls, April 5-9, 2017, and April 2-11, 2018 (combined averages)

Bottom Line

Americans who are now 18 to 34 years old were between the ages of eight and 24 when the stock market crashed in 2008. Those aged 25 to 34, who have more income to invest than those under 25 and are therefore more likely to own stocks, were in their teens or older -- ages when many would have seen and understood the effects the crash had on Americans' confidence in the stock market as an investment.

Older Americans, who had seen the market recover from previous shocks, have been more willing to hold on to their stocks and see what happens in the long run. So far, that approach has appeared to pay off. Though the market has been through some spectacular drops and volatility earlier this year, the Dow Jones industrial average has more than tripled in the past nine years.

Survey Methods

Results for this Gallup poll are based on interviews for Gallup's Economy and Personal Finance polls, conducted annually in April from 2001 through 2018, with random samples of 1,003 to 2,017 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia. For results based on the total sample of national adults, the margin of sampling error is ±4 percentage points at the 95% confidence level. For results based on the two-year averages for total samples of adults 18 to 34 years old, the margin of sampling error is ±5 to ±7 percentage points at the 95% confidence level. All reported margins of sampling error include computed design effects for weighting.

Landline and cellular telephone numbers are selected using random-digit-dial methods.

View survey methodology, complete question responses and trends.

Learn more about how the Gallup Poll Social Series works.

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