The Management and Impact of Losses

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2021-04-01

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The growing wealth disparity between the top 1% of America and the bottom 70%-80% is partly due to the lack of engagement by the bottom half of the country with the financial markets. The top 1% holds close to 50% of all stocks in the market, whereas the bottom 50% holdsabout.25%ofstocks.Theway to get out of poverty is to have income, but the way to achieve financial stability is to build wealth and plan long term. The problem however is that those who experience poverty or who are part of the bottom half of the country, have much more to lose, therefore are averse to investing in the stock market. There is also the case of the lack of knowledge regarding the markets and market strategies, and the tendency to exit the market when loss occurs.

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