Reuben Gregg Brewer, The Motley Fool
4 min read
In 2025, 62% of Americans owned stock, according to Gallup. This is something the pollster has looked at annually for years, with the percentage ranging between 52% and 62% over the last 25 or so years. While it is nice to see that a large portion of Americans have stock exposure, I think that number should be far closer to 100%. Here’s why.
The “Oracle of Omaha” explains it all
Warren Buffett, one of the world’s most famous investors and former CEO of Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB), has long suggested that most people should just buy the S&P 500 index (SNPINDEX: ^GSPC) and call it a day. His logic is fairly simple. Investing in individual stocks is time-consuming, emotionally draining, and, frankly, difficult to do well.
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Buying stocks isn’t a task that everybody should undertake. You should probably only do it if you enjoy investing. If you don’t, outsourcing the task makes a great deal of sense. And the S&P 500 is a perfect choice, since the stocks that get included are meant to be representative of the U.S. economy. Buying the S&P 500 index is essentially a diversified bet on U.S. economic growth. And it’s easy to buy, with exchange-traded funds (ETFs) like SPDR S&P 500 ETF (NYSEMKT: SPY), the first ETF ever created, and Vanguard S&P 500 ETF (NYSEMKT: VOO). One trade and you’re done, though, as Buffett would likely recommend, you should probably continue adding to your chosen ETF on a regular basis.
However, shift gears a little bit and look at owning the S&P 500 not as a bet on the U.S. economy, but as having a stake in the country’s economic success. That changes the story dramatically. Only around 60% of Americans, mostly wealthy Americans, have a stake in the country’s growth. That’s far too low a figure. It would be better if 100% of Americans could benefit. Then every American would have a vested interest in the success of U.S. style capitalism.
100% isn’t a reasonable expectation
I’m not an idealist; I know that 100% of Americans owning stocks is an impossible goal. There are too many unique life situations to allow that to happen. However, 60% is too low, leaving 40% watching as others benefit from the economic growth their hard work helps produce. I believe we would all be better off if more people could build financial wealth through stock ownership, so we are pulling in the same direction and reaping the same benefits.
