Wealth, as measured by assets owned by individuals among all income brackets, surprisingly is not as perceived by most. Federal Reserve data show that the top 1% hold just over 11% in real estate related assets, while the bottom 50% hold over 50% in real estate. Data also reveal that the top 1% own nearly half of all equity and mutual fund assets, while the bottom 1% own only 2.5%.The vast disparity helps explain how the top 1% did so well during the pandemic, primarily due to rising equity valuations over the past year.
Fluctuations in asset values vary among asset types and the economic environment. Inflation has historically helped lift real estate values yet has hindered stock and bond values when too much was present. Income and wealth disparity has become a trending topic lately as the top 1% has garnered enormous gains during one of the most tumultuous periods in history.
As of the end of 2020, over $38.6 trillion of wealth was held by the top 1%, while the bottom 50% held just under $2.5 trillion in wealth. Federal Reserve data qualify the top 1% as those with a net worth valued above $11 million.
Sources: Federal Reserve
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