Author Topic: Wil retail investors needing to sell stocks to survive cause stock declines?  (Read 482 times)

FrugalSaver

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Or is fed too powerful and retail too small?

$1200 isn’t much. Most invested in markets with taxable investments  get nothing. What % of unemployed do they represent?

Who’s left naked when the tide rolls our?

Michael in ABQ

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I'm not sure what percentage of Americans own any significant amount of stocks outside retirement accounts, but I'm guessing around 15-30%. I don't and my income and net worth are above average for my age and for household in the US in general. All of my stocks (less a few hundred sitting in an old brokerage account) are in my 401k or Roth IRA.

The people sitting on $10,000+ in stocks in taxable accounts probably have equity in their homes, other savings, and more secure jobs that are less likely to go away in the short-term.

The restaurant employees and other hourly workers who are all now unemployed probably don't represent more than a fraction of a percent of holdings in equity markets, not enough to make any significant dent if they all sold. 

Villanelle

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Or is fed too powerful and retail too small?

$1200 isn’t much. Most invested in markets with taxable investments  get nothing. What % of unemployed do they represent?

Who’s left naked when the tide rolls our?

Well, it's $1200 plus unemployment, which is a significant difference. 

waltworks

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I'd guess that for the vast majority of unemployed folks, their unemployment benefit will match or exceed their usual pay, thanks to that Federal $600/week bonus.

I mean, $2400/mo + your normal UE benefit is a decent amount of money. My family of 5 could live on that if needed, and we have a $2000 mortgage to pay.

Michael's point is a good one, too. Almost none of the folks losing jobs have any meaningful equity exposure. They're not swimming at all, for better or worse, so the tide going out has zero effect.

-W