Share Of Americans Who Invest In Stocks Doubles Growth In Decade Indicates More Cash From Women, Young

The percentage of Americans who invest in stocks has more than doubled this decade, with 43 percent of adults owning either a stock mutual fund or shares of stock in a company other than the one for which they work.

The increase - from 21.1 percent in 1990 and just 10.4 percent in 1965 - reflects a heightened interest in the stock market by members of various demographic groups, fueled by a record growth in mutual funds and rising stock prices.

These are some of the findings of a survey done in January for the Nasdaq Stock Market. The survey also asked detailed questions of 1,214 investors and 252 potential investors.

The survey found that stock and mutual fund investors are still “not a representative cross-section of America” and tend to be wealthier, better educated and white. “Nonetheless, it is striking the degree to which stock investing is no longer the exclusive province of the affluent, men or the old,” said the survey by Peter D. Hart Research Associates of Washington.

According to the findings:

Forty-seven percent of stock investors are women, a figure that rises to 50 percent among those who have invested for the first time in the past three years or who have not invested but plan to do so in the next 12 months.

Less than half, 44 percent, are white men.

A majority, 55 percent, are younger than 50.

Half are not college graduates.

Most of working age are in a non-managerial white-collar or bluecollar job.

The rise in the number of investors is not simply a matter of many people owning just a handful of fund shares or stocks, the survey said. About two-thirds of all stock and mutual fund investors say their holdings exceed $10,000 and make up more than 20 percent of their total investments.

Despite 15 years of mostly rising stock prices, the survey described the mood of most investors as one of “rather cautious optimism,” only slightly more upbeat than in June 1988, less than a year after the October 1987 market crash.

Asked how they would respond to a big drop in the market, only 8 percent of investors said they would sell to avoid further losses, while 31 percent said they would take advantage of lower prices to buy more.

However, Peter Hart, president of the research firm, warned that these answers “cannot be taken at face value” because it is difficult for investors to predict how they would react to events that have not yet occurred.