U.S. households’ stock allocations hit an all-time high in 2024’s first quarter as technology stocks have propelled the SPDR S&P 500 ETF Trust ( SPY ) and the NASDAQ Invesco QQQ ETF to all-time highs.

The Data: According to data from the Federal Reserve Bank of St. Louis, household financial asset allocations in the corporate equities market hit an all-time high in the first quarter of 2024.

Households had 41.59% of their financial assets invested in corporate equities, higher than other relative peaks during the 2021 market boom (41.46%) and the 2000-2001 dot-com bubble (38.38%).

Equities allocation bottomed out in the 1970s and 1980s following four recessions between 1970 and 1990.

The number hit a 21st-century low during the 2008 financial crisis, at 18.86%. Households hold more than twice the amount of stocks today than in 2008.

Why it Matters: Since the 2008 financial crisis, the Nasdaq has rallied over 1,700% while the S&P 500 is up by over 700%.

The data indicates that households benefit more from the U.S. market’s rally than they would have at any other point. Notably, the top 10% of Americans hold over 90% of stock market wealth. However, online brokerages like Robinhood have helped democratize investing to some extent among retail investors.

Higher household stock allocations indicate a shift towards riskier assets and away from safer investments like bonds or cash. This may lead to increased volatility in the stock market as investors react to changing market conditions.

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