November 11, 2005

More American Households Own Stocks

More than half of all U.S. households and one in three individuals own stocks directly or through mutual funds, according to a survey released Thursday by trade groups for the securities and fund industries.

Equity ownership has increased over the past two decades to the point where nearly 57 million households own stocks or funds, the survey by the Investment Company Institute and the Securities Industry Association found. By comparison, the number of households owning stocks directly or indirectly stood at 40 million in 1995, and 16 million in 1983, the groups said.

Equity ownership has been fueled largely by the expansion of defined contribution retirement plans, especially 401(k) plans, the survey found. The number of households owning stocks through employer-sponsored plans, which often offer mutual funds as investment options, increased by 5.2 million to 37.6 million between 1999 and this year.

However, nearly three quarters of all equity investors hold stocks outside retirement plans, and they buy stocks mainly through professional financial advisers, according to the survey. More than three quarters of investors who own stocks outside retirement plans bought them through advisers.

The survey also found that nearly all stock owners view their holdings as long-term investments.

The survey's results are based on interviews with more than 4,900 people conducted last January. The trade groups last surveyed equity owners in 2002.

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