– Until recently inequality has been viewed by investors as a factor in stock picking, and not so much an indicator of economic health. Consumers with higher incomes tend to have a more optimistic view of the economy, and therefore spend more money. “If the rich are getting richer, companies that cater to them have better prospects,” says, Justin Lahart in his piece “Worry Over Inequality Occupies Wall Street“. However, that sentiment is beginning to shift. Lahart goes on to say that “some big investors have worried increasing income and wealth gaps threaten the economy’s ability to expand.” He references a recent note from Bill Gross saying, “Developed economies work best when inequality of incomes are at a minimum.” Income inequality may be inevitable in our country, but with both the inequality gap and the stock market at record levels, it may be indicating that our economy is heading in an unhealthy direction.

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Worry Over Inequality Occupies Wall Street

By JUSTIN LAHART