Furthermore, it is mostly hedge funds that benefit from short-term price gains, as they're frequently leveraged, often with options. Long-term holders like individuals and mutual funds are usually unleveraged.
People need to educate themselves on personal finance matters like this because inaccurate thinking towards seriously emotional issues like this has dangerous consequences.
Your example looks correct. But I don't see how is the common case. Middle class investors usually don't have more percentage in the market that the 0.1%. Most middle class main investment is the home they live in.
While this is true for many, the extent of 401(k) might signal differently. Also, most of the wealthy I know have far less in the stock market than you might imagine. Real Estate, development and private placements. Stock Market is too tax inefficient.
Keep in mind that when referring to real estate the value is often the equity (asset - debt) not the asset value itself. Pretty sure that is the case with SCF data from the Census.
https://www.financialsamurai.com/what-percent-of-americans-o...
That doesn't necessarily mean 48% cannot invest in stocks - they just may be unwilling to. I know many middle class people who invest in other things besides stocks, like bonds and real estate, as well as the proverbial mattress.
> strapped with significant debt
Buying a house with a mortgage is leveraging an investment debt. In fact, leveraging an investment IS taking on debt.