Why 60% Stock Ownership Among Americans Falls Short of an Inclusive Economic Vision

Key Points

• Warren Buffett has often suggested that investors buy the S&P 500 index, which basically allows you to benefit from the growth of the U.S. Economy.

• It would be better if every American had the opportunity to benefit from U.S. Economic growth.

• 10 stocks we like better than Vanguard S&P 500 ETF ›

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.

One way to get more people to invest is through increased financial education. That should probably happen in middle school, if not earlier. Finance could easily be incorporated into math lessons. Starting this early would get the message out before life’s complexities make learning about finance a time drain that some just can’t afford.

Another option is to create accounts for children that would be at least partly funded by the government, which is something that the current administration is attempting to set up. However, this isn’t a new idea; it is one that has been floated for a long time by people across the political spectrum. It is too early to know how successful such accounts will be, but more people owning stocks is, in my opinion, a win. I’m optimistic that these accounts will change many lives.

Bridging the gap with stocks

My father taught me the value of investing, which is something he learned from his father. Not everyone gets this lesson, and sometimes the lesson alone isn’t enough, because life is difficult and expensive. But I believe that 60% of Americans owning stock is far short of the ideal goal, which I believe is 100%. Sixty percent just leaves too many people without a vested interest in the massive wealth that U.S. Economic growth has created for so many.

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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

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