Below are the changes in share of net worth for the following socioeconomic categories between 1990 and the end of 2025:
Bottom 50%: -26%
50-90%: -18%
90-99%: -4%
Top 1%: +39%
Top 0.1%: +67%
It’s not so much the share of wealth that matters most—it’s a common debate where the optimal level should be—but rather the direction of that share over time. Those categories at the top of the economic strata that hold the bulk of financial assets tend to be held in check by recessions and market corrections…until they figure out how to commandeer government institutions to minimize them and socialize the costs associated with rescuing them, which they have clearly done.
These trends don’t last forever. Those at the top of the strata, whose piles are growing, want to keep them, while those with shrinking piles at the bottom get increasingly discouraged and unruly and want change. Much akin to the 1920s and the sentiment that drove policy throughout the 1930s. The wealth divide was huge, and people were fed up.
It will be interesting to see how much of what’s to come rhymes with that period. David vs. Goliath. Either a return of some power and wealth from Capital to Labor to preserve the (American) system, or a double-down and increase in power and control by those who currently have it. Globalism confuses this.
The former favors government bonds and gold and would be bad for stocks. The latter is more of a wild card, but would likely also end in big stock market declines, at least temporarily. More power can be gained by letting stocks implode and gobbling up good assets cheaply on the other side. Warren Buffett didn’t build his wealth by going down with the ship. The smartest at the top understand the opportunity in busts. The big question is what lies on the other side of it.
What we know for sure is that things will change.
Lots happening.
Important Disclosures
This blog is provided for informational purposes and is not to be considered investment advice or a solicitation to buy or sell securities. Cadence Wealth Management, LLC, a registered investment advisor, may only provide advice after entering into an advisory agreement and obtaining all relevant information from a client. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.
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