American Stock Ownership Will Drop to 54% by 2030. One Sector Is Driving It.

2. Margin calls will shell-shock some overconfident investors right out of the market, and for a while

It’s also worth noting that as of August, margin balances — money borrowed from brokerage firms for their clients to buy more stock — have soared to a record-breaking $1.4 trillion.

FINRA Margin Debt data by YCharts

This, in and of itself, doesn’t inherently mean a huge number of people are going to get out of the stock market altogether. As someone who was in the industry back in 2007 and even all the way back in the 1990s, I’d say this sort of unquestionable confidence can and eventually does come back to haunt investors, and particularly newcomers who don’t fully appreciate just how devastating an ill-timed margin call can be. Such a reckoning will run a bunch of investors off for a while, and at this point, I think that reckoning is inevitably going to materialize sooner rather than later.

3. Better risk-versus-reward propositions

Perhaps more than anything, though, I believe the number of U.S. residents exposed to the stock market will ease back to a multiyear low of 54% — last seen in 2017, on the way up from 2016’s figure of 52% — largely because many investors recognize the broad market’s valuation problem at this time and for the likely foreseeable future. By some inflation-adjusted measures, the S&P 500 (SNPINDEX: ^GSPC) is now nearly valued at a three-decade high, which is part of the reason both Vanguard and J.P. Morgan expect the S&P 500 to only earn a subpar average annualized return of between 6% and 7% for the next 10-plus years.

These investors aren’t simply giving up on growing their money, though. They’re just likely to find more promising prospects, perhaps like private investments, real estate, cryptocurrency, and others.

Seen it before, much like this

Again, none of this is to suggest a post-AI-boom lull, likely to be led by technology stocks, will be catastrophic (if one materializes at all). There’s always a chance that the proliferation of AI could keep these stocks moving or rekindle those that recently stagnated.

The market’s and investors’ behavior is pretty predictable, even if it’s not precisely so. This debt-driven boom has produced a great deal of fear of missing out, as we saw in 1999 and 2007. Interest rates are rising to combat inflation, as we also saw in those same pre-pullback years. This time around might be an exception. Even if we don’t suffer a full-blown recession or bear market, the stage is certainly set for the lingering underperformance that Vanguard and J.P. Morgan anticipate for the foreseeable future.

So I’ll say it again — with the AI trades that have been setting the tone and the pace for so many other corners of the market now losing their luster, I think the ripple effect of this cooling is going to dial back the nation’s participation in the stock market from 58% of its residents now to 54% by 2030, when only about 147 million American adults, versus 156 million at this time, will still own stocks and/or stock mutual funds.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again

In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. If you’d invested $5,000 then, you’d be sitting on $2,955,706 today.*

Now, for the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. It’s a key player in the $1.8 trillion space race, and with the stock recently sitting 20% off its highs, the window to get in early is closing fast.

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*Stock Advisor returns as of September 21, 2026

JPMorgan Chase is an advertising partner of Motley Fool Money. James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, JPMorgan Chase, and Nvidia. The Motley Fool has a disclosure policy.

My Prediction: American Stock Ownership Will Drop to 54% by 2030. One Sector Is Driving It. was originally published by The Motley Fool