America’s top 1% just lost $1.5 trillion on stocks before the bear market hits. Let’s find out the stock market news and explore in details.
You will not believe this, but America’s top 1% just lost $1.5 trillion on stocks before the bear market hits. This is an enormous loss, and it’s only going to get worse from here. If you want to protect your money, you need to Read this Post.
The losses piled up for wealthy Americans in the first quarter of this year, according to new Fed data. The downturn in equities was just beginning.
Even before US stock market news tumbled into a full-blown bear market this week, the country’s richest 1% were staring down huge losses.
The Federal Reserve’s new calculations reveal that the market’s overall wealth dropped by $701 billion in the third quarter, fulfilling a prediction made last month. It’s an abrupt end to an extraordinary two-year stretch that boosted their collective net worth by more than $11 trillion.
According to these numbers, while the aggregate value of assets destroyed in recent weeks among the top 1% may appear large, it puts into sharp relief how much wealth has been lost by Americans in recent months. Since March 31, the S&P 500 Index has fallen 19%, whereas the technology-rich Nasdaq 100 has dropped 24%.
“People are afraid,” said Nicole Gopoian Wirick, a financial advisor and president of Prosperity Wealth Strategies. “No one wants to see their investment portfolio suffer a loss of 20% or more. Because it is a large number, the drop can be greater for wealthier clients.”
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The stock market losses ate into the share of wealth controlled by the top 1% of Americans, with that figure slipping to 31.8% at the end of the first quarter from a record 32.2% at the start of the year, according to the Fed’s data. Still, their collective net worth remained almost $45 trillion, more than the $43.5 trillion held by the bottom 90%. Aside from last year, the top 1% hold a greater proportion of US wealth than at any point in the central bank’s estimates dating back to 1989.
The top 1% controls a larger share of U.S. wealth than the bottom 90%
Source: Federal Reserve Distributional Financial Accounts
Outside of the top decile, individuals in other countries hold far less stock than their counterparts in the United States. This helped protect them from the volatility that occurred during the first three months of this year. The real estate market, which was a key factor in pandemic-era wealth gains for both rich and middle-class people alike, has also shown signs of stress in recent weeks.
The wealthiest individuals, who benefited the most from the stock market news run through 2021, provide a clue as to the size of the riches’ losses. Americans on the Bloomberg Billionaires Index have lost about $760 billion so far in 2019, including roughly $690 billion during the second quarter.
The poorest half of Americans increased their net worth for a fourth straight quarter in Q1, continuing a trend that began when Covid-19 was first detected in the United States in early 2020 and the federal government gave trillions of dollars in relief and fueled a hot labor market. The group’s net worth rose by $164 billion.
In addition, upper-middle-class Americans enjoyed a boost in their net worth. The rest of the top 10% — especially exposed to the stock market — plummeted further.
The rich have reaped the benefits of a spectacular rise in equities and other assets’ value during the previous five years. Even before the S&P 500 delivered 18% returns in 2020 and 29% returns in 2021, it had returned 22% in 2017, and 31.5 percent in 2019, after a single-digit 2018 decline” We’ve had several years of sustained bull markets — we’ve got a lot of pent-up gains,” says Tara Thompson Popernik, director of research for Bernstein Private Wealth Management’s wealth planning and analysis department. But past hikes may do little to ease the psychological blow of recent losses, she added.
Some clients might find that their assets are falling in value and may profit from it by harvesting losses. This can help them save money on their taxes.
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