The stock market remains the dominant engine of wealth growth, particularly for the top 10% and especially the top 1%. Recent data from CNBC and the Federal Reserve reveals that corporate equities and mutual fund shares held by the wealthiest Americans surged from $39 trillion to $44 trillion, with the top 1% now controlling over half (50.2%) of all U.S. stock ownership as of Q3 2025.
Stocks Outperform Bonds Over the Long Term
Historically, stocks have significantly outperformed fixed-income assets due to their inherent higher risk. Analysis of returns from 1920 to 2019 shows that U.S. and Canadian equities averaged a 10.9% annual return (8.2% adjusted for inflation), while bonds yielded only 4.9% (2.3% adjusted for inflation). This means equity investors saw returns more than 3.6 times higher over the long run.
However, higher returns come with increased volatility, and past performance is never a guarantee of future results.
The Simplest Strategy Often Works Best
For average investors, financial advisors recommend a straightforward approach: long-term investing, broad diversification, and goal-oriented planning. This is supported by research showing that simply buying and holding an S&P 500 index fund can outperform even top university endowment funds. From 2016 to 2025, the S&P 500 averaged a 13.7% annual return compared to 9.2% for Ivy League endowments.
The most effective approach for most people is “long-term thinking, broad diversification, and goal-oriented planning.” – Paul Ferrara, Senior Wealth Counselor at Avenue Investment Management
The wealth disparity is exacerbated by these returns, as those with capital are best positioned to benefit from the stock market’s long-term growth. This trend raises questions about systemic inequality and the role of financial markets in widening the wealth gap.
Conclusion: The data confirms that stock market wealth is increasingly concentrated at the top, driven by superior long-term returns. For average investors, a simple index fund strategy can yield better results than even institutional funds, but the underlying issue of wealth inequality remains.
