More than half of low- and middle-income Americans are now investing in the stock market, with a majority starting in the last 5 years. The top 1% of wealthy Americans still own half of all stock, but technological advancements have made it easier for anyone to invest. Online platforms offer easy access with low barriers to entry.

During the COVID-19 pandemic, 46 million new brokerage accounts were opened by individual investors. The pandemic prompted many Americans to try investing as they saved money and had more time at home. Stocks and real estate have traditionally been gateways to wealth, but rising home prices have made stocks a more accessible option for building net worth.

The stock market has seen significant growth over the past decade, with the S&P 500 rising by 261%. Rising stock ownership among lower-income Americans could help reduce wealth disparities in the future. Despite the growth in stock ownership, many new investors are more focused on individual stocks rather than diversified funds, which experts suggest could be riskier.

Survey data shows that new investors are eager for information on diversifying their investments. The financial services industry can help by encouraging emergency savings accounts to provide financial security for investors. Having emergency savings can prevent lower-income families from cashing out investment accounts for unexpected expenses.

The goal for many lower-income investors is to build wealth for retirement, reduce financial stress, and provide for their families. Encouraging responsible investing practices and financial literacy can help new investors make informed decisions and build long-term financial security.

Read more at Yahoo Finance: More than half of low and middle-income Americans now own stocks. Here’s why.