Election Section

NEW YORK — It’s no longer just a place where prices jump around like corn in a popper, an indulgence of the rich but of no particular concern for most families. 

For more than half of American households, the stock market is now to various degrees the financial future, the source of tuitions, the provider of luxuries, the guardian of financial security and retirement. 

And, based not just on a trend line two decades long but on more recent developments, it is destined to encompass ever more families, making securities for many their most important asset. 

In 1980, 53 percent of the liquid assets of U.S. households were in banks, often deposited there by handing cash and a passbook to a teller. In 2000, the percentage had fallen to 20. The rest was in securities. 

That tells but part of the story. Households in 1980 owned 2.8 trillion in liquid assets; by 2000, they had amassed $17.3 trillion. In 1983, 42.4 million individuals owned stocks; in 2000, 78.7 million. 

Significant as other indicators is the makeup of ownership, which has filtered down from the rich to less rich.  

The Securities Industry Association says the typical stock owner has household income of $60,000. 

Because of this massive change, the stock market today is probably as good an economic thermometer and barometer as any other indicator, giving a fairly accurate reading of current health and a forecast of the future. 

That being so, Federal Reserve Chairman Alan Greenspan could hardly ignore the gloom that had settled like a chemical fog on the market, suffocating what he had once referred to as irrational exuberance. 

Equally to be feared, the Fed suggested in its sudden, 0.5 percentage point cut in interest rates, is a situation in which consumers, most from investor households, are too depressed or even unable to spend. 

The transformation from saver to investor has come a long way, and the trend has built-in elements that assure continuance. 

It is now a way of life, with payroll withholding incentives (automatic, record-keeping, even discounts) for employee and employer alike providing a direct pipeline into mutual funds and stocks. 

Mutual funds especially have been a catalyst for the evolution of saver to investor. An idea of the role they have played is offered by the SIA in this summary: 

“It took 10 years for (mutual fund) assets to grow from $100 billion to $1 trillion in 1990.; three years to reach $2 trillion in 1993; and just over two years to reach $3 trillion in 1996. Less than four years later, assets have more than doubled to $7 trillion.” 

Increasingly, pension investments are becoming self-directed through 401(k) programs, again via automatic payroll deductions, and pressure has mounted for allowing workers to invest a portion of Social Security withholdings in equities. 

Technological advances also are part of the transition. Low-priced computers and the Internet allow individual investors to obtain massive amounts to data and easy access to the market.  

And a profusion of newer, mobile devices is likely to quicken interest and probably trading too. 

It means that the economic impact of the securities markets, especially for equities such as individual corporate stocks and mutual funds, has been hugely expanded in the past couple of decades. 

The stock market isn’t just for the rich anymore. It’s where producers and consumers interact, and how they interact is written boldly in the performance of the economy. 

John Cunniff is a business analyst for The Associated Press