This analysis examines recent trends in stock ownership and explains the reasons for the dramatic increase in stock ownership among a broader and increasingly diverse number of Americans. The key reasons for this democratization of the stock market include:
- The popularization of the mutual fund.
- The general reduction in the multiple taxation of savings and investment that resulted from the genesis of the IRA and 401(k) plan.
- The emphasis of the Federal Reserve on price stability that has lowered interest rates, stabilized financial markets, and acted as a de facto tax cut.