Big Board officer surveys wider spectrum of investors

As an employee of the New York Stock Exchange, Stan West cannot make stock price predictions. It's a taboo. But the head of the Big Board's Business Research Department does see several ''environmental considerations'' that are favorable for investors this decade.

* The baby-boom generation has moved into the age bracket where its members are likely to have funds for investment. This group is more highly educated than any previous generation and thus should be'better able to master the intricacies of stock investment. Its many two-income families also give it a high average income level.

* The number of shareowners in the United States has already been growing more rapidly. The average monthly increase, according to New York Stock Exchange (NYSE) studies, was 87,100 between 1975 and 1978. It stepped up to a 132,300 monthly gain in 1979 and the first half of 1980. For the following year the monthly increase was 197,900 on average.

* After declining some 18 percent in the bear market years in the 1970 to 1975 period, stock ownership has recovered. The number of Americans who own common stock directly increased by 2.1 million persons, or nearly 7 percent, to 32.2 million from mid-1980 to mid-1981, Big Board surveys show. That's a record level, up from 30.8 million in 1970. But as a share of total US population, the 14.4 percent who owned stock in 1981 is slightly less than the 15.1 percent in 1970.

In effect, 1 out of every 4 US households own stock directly.

* The securities industry sales network has become much more widespread. At the end of 1981 member firms of the NYSE had 4,575 sales offices and 51,600 full-time registered representatives selling stocks and other investments.

Moreover, non-brokerage businesses are moving into the securities area. Prudential Insurance took over Bache; Sears Roebuck bought Dean Witter; Security Pacific has tied in with Fidelity, and so on.

''Brokers can provide service and access to the stock market to the public nearly anywhere,'' said Mr. West in an interview.

* The spread of corporate stock ownership plans is introducing many new investors to stocks. These plans sometimes enable an employee to buy his company's own stock; or they may provide for purchase of a pool of stocks, such as through a mutual fund.

Some 32 percent of all adult shareowners made their first stock investments through such plans, Mr. West says. About 42 percent made their first investments through broker-dealers.

People participating in stock ownership plans usually get statements, proxy forms, and annual reports and thereby get some education in securities. ''They are getting exposed to something which might not be familiar to them,'' says West.

* Altogether, about 3 out of 4 men, women, and children have a direct or indirect stake in the stock market. Direct ownership includes investment in a stock mutual fund as well as an individual portfolio of stocks. An indirect stake in stocks could include an interest in a pension plan, a life-insurance contract (some life insurance funds are put into the stock market), a mutual savings bank deposit (these thrifts can invest a small portion of their money in stocks), and college funds (those obtaining college scholarships or research grants are counted).

* The 1981 tax law encourages equity investment in several ways.

The effective tax rate on long-term capital gains has been trimmed to 20 percent. Previous cuts in this tax appeared to stimulate stock investment. The maximum tax on ''unearned'' income, such as stock dividends, has been reduced from 70 percent to 50 percent. There's a provision for tax-free reinvestment of dividends in public utilities. Incentive stock options for executives have been liberalized. Eligibility for individual retirement accounts (with $2,000 tax-deductible contributions) has been greatly liberalized, and some of this money will go into stocks. Also, there's a higher maximum for Keogh retirement plans of self-employed persons. Employee stock ownership plans have been liberalized.

In addition, West thinks some more general tax-relief measures - the cuts in personal income tax rates, the relief from the ''marriage penalty'' in the income tax, and the liberalization of estate and gift tax provisions -- may encourage more stock investment.

''One of the objectives of the Tax Recovery Act of 1981,'' West notes, ''was to stimulate investment. All of these incentives to invest will make it easier for companies to sell new stock or bond issues at some point.'' But, Mr. West admits, the stock market has not been too attractive to investors for the last 12 months or so. Stock prices have fallen. But with economic recovery and an improvement in corporate earnings, that could change.

Concludes Mr. West: ''The opportunity to learn about stock investment and participate in the stock market is much greater than ever before -- and the incentive is there.'' Now it remains to be seen whether more people actually do invest more money in stocks, presumably pushing up prices.

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