I really do not trust headlines. I am afraid that many Americans read the headline and perhaps the first paragraph but not much more.
This headline comes from the Washington Post: “As Economy Recovers, the Richest get Richer, Study Shows.”
The headline fuels the thought that the rich are getting away with something. The most affluent Americans, the upper seven percent of households, saw their wealth increase by approximately 28%.
While middle class income earners did not experience that increase, the more important question here is whether middle-class Americans were kept out of the game or could middle-class Americans have experienced a similar benefit?
The increased wealth comes from asset inflation in stocks and other financial instruments. Note that the S&P500 is up 11.4% above this time last year. The wealthy have a significant portion of their wealth tied up in the financial market.
The Federal Reserve Board has been helping the marketplace by pumping $85 billion a month into the economic system. The wealthy should thank the Fed for their growing wealth.
The good news is that investing in the stock market is open to all, and the potential reward is available to all.
