FYI: From 1928 to 2016, the average annual stock return was about 8 percentage points higher than the return on three-month Treasury bills. This leads to sizable return gaps over time: $100 investments in stocks and in Treasury bills in 1928 would have yielded nearly $329,000 and $2,000, respectively, 88 years later.1
Given the high return of stocks, it is puzzling that many households do not participate in the stock market and, hence, forgo the high return. In addition, the nonparticipation behavior is at odds with modern portfolio theory. The theory implies that all households should invest at least a fraction of their wealth in stocks in order to take advantage of the equity premium. However, the data show that many households do not participate in financial markets.
Regards,
Ted
http://ritholtz.com/2017/09/household-participation-stock-market-varies-widely-state/
