The economy is great, personal wealth is on the rise – why do people feel so bad?

U.S. household wealth is at an all-time high. From 2020 to 2023, our neighbours to the south enjoyed the fastest wealth boom ever, accumulating US$156 trillion. This was fueled by a combination of rising real estate values and unprecedented gains from stock portfolios.

While it’s true that the wealthiest individuals or 10% of Americans own 87% of all stocks, it’s also true that nearly 60% of total households now own stocks either directly or through mutual funds and retirement funds. The result: the wealth of the middle class has increased by 45% or $14 trillion in just three years.1

More good news: the U.S. economy remains strong in the face of rising interest rates, inflation, and ongoing geopolitical, climate and societal challenges, including growing polarization. Real Gross Domestic Product (GDP) increased 3.4% in the fourth quarter of 2023, down slightly from 4.9% in the third quarter but still strong.2

Here in Ontario, Premier Ford announced the province has cut the cost of doing business in the province by $8 billion a year and last year alone added more than 180,000 new jobs, including more manufacturing jobs than all American states combined.3

It’s truly remarkable – and yet, there is a big disconnect between economic data and how people are actually feeling. Instead of being optimistic, people are worried.

Why? Everything costs more: groceries, restaurants, credit, taxes. The average person feels their day-to-day reality is not reflected in the data. This is particularly true if you don’t own your own home or have an investment portfolio. It’s hard to feel wealthy when you are squarely focused on paying for today and not putting anything aside for tomorrow.

People invest to purchase a home, to pay for education, to build generational wealth – to get ahead in life. Optimism is built into this type of planning. And that’s where the disconnect between what the data is telling us and how some people are feeling comes into play. People who are not investing are the ones saying they don’t feel any wealthier or that they are in a position to better cope with whatever surprise life has in store.

Since June 2022, after inflation hit a high-point of 8.1%, Canadians have consistently heard about falling inflation. Some assume that falling inflation will result in lower prices, but that isn’t happening.

The fall in the inflation rate means that price increases are slowing. The costs of good and services are still rising, just at a slower pace. Thus the increase of 2.8% (current inflation rate) is on top of the 8.1% inflation rate we saw back in 2022. For many, their wages have not increased at the same rate as inflation, so they continue to spend more on goods and services. Consequently, many feel they are falling behind.

My best advice: adopt a long-term mindset and start investing – whatever you can afford. Take a close look at where your money is going and direct what you can to stocks or mutual funds and invest for your future.

The markets work for everyone. That’s because markets go higher over time. There is no doubt about that – we have proof. The Dow Jones Industrial Average topped 40,000 on April 1. It reached 10,000 on March 29, 1999.4 From 2020 to this year, the S&P 500 has grown from 3,700 to 5,200.5

The markets will continue to go higher and people who invest will continue to grow their wealth. It’s that simple. If you’re not invested, it’s time to get started.

Call Me or Email Me
My approach to investing is straightforward. I study the markets, global economies and what’s happening within industries to be in a position to best help my clients find good quality investments that will help them meet their goals. I build custom portfolios for each client. I welcome you to call me at 416-332-3863 or email me at allan@allansmall.com.


      1. Household wealth reaches an all-time high of $156 trillion, CNBC
      2. Gross Domestic Product, Bea.gov
      3. Premier Doug Ford’s Speech at the 2024 Rural Ontario Municipal Association Annual Conference, News Ontario
      4. Dow Jones Industrial Average First Published, Library of Congress
      5. S&P 500 Index – 90 Year Historical Chart, Macrotrends