STOCKS REBOUNDED

In the months after the crisis erupted, stock prices tumbled like so many dominoes. Government officials, bankers and economists warned of a contagion in which the crisis that originated with bad home loans would seep from Wall Street to publicly listed companies and small town businesses.

The financial shockwave struck Europe, Asia and practically everywhere else. The Fed did what it could to stabilize markets. It slashed its key short-term rate and bought government debt and mortgage-backed securities to force down longer-term loan rates.

The Dow Jones Industrial Average bottomed in early 2009 after having shed half its value. By early 2013, it had surpassed its previous high. And stocks kept climbing. Investors no longer worry as they once did that the financial system will implode. Yet despite the stockprice gains, there still isn’t much widespread trust in the market.

Last year, even when the S&P 500 was riding a powerful upsurge, investors put $186 billion into stock funds, according to the Investment Company Institute. They showed less eagerness than in 2007, just before the Great Recession, when investors poured in $201 billion into stocks.

Stock holdings are still concentrated among the wealthiest Americans—even more than on the eve of the recession. Among families in the top 10 percent by income, 95 percent own stocks, according to the Fed.

The typical family in the top 10 percent by income had $363,400 in stock investment as of 2016. The typical middle-income family—between the 40th and 60th percentile—has only $15,000 in stock investments, down from $20,200 in 2007.

— Stan Choe