88% Of Stocks Are Owned By Three Companies—Does It Matter?

Summary

Ramsey Everyday Millionaires - Episode Summary

Episode Title: 88% Of Stocks Are Owned By Three Companies—Does It Matter?
Host/Author: Ramsey Network
Release Date: June 6, 2025

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Introduction to the Episode

In this episode of Ramsey Everyday Millionaires, the Ramsey Network hosts delve into a pressing question concerning stock market ownership and its implications for investors. Listeners are guided through a detailed discussion aiming to demystify claims about stock concentration and its potential impact on individual investment strategies.

Main Discussion: Stock Ownership Concentration

Ken Coleman opens the conversation by addressing a claim made by a listener from Delaware, Aaron, who posits that "88% of shares in the stock market are owned by three major companies: BlackRock, State Street, and Vanguard," questioning whether this concentration should be a cause for concern or influence investment decisions.

Dave Ramsey interjects to clarify the nature of these major firms. At 00:43, Ramsey explains, “They’re mutual fund companies. They manage mutual funds. They don’t own the shares.” He emphasizes that while these companies manage vast amounts of assets through mutual funds, they do not individually own the underlying stocks.

Ken Coleman continues the explanation by highlighting that mutual funds, which include holdings from companies like Vanguard and State Street, consist of diversified portfolios typically containing 90 to 200 different stocks. This diversification means that individual investors, including those with 401(k) plans, indirectly own shares across a broad spectrum of companies through these funds.

Analysis and Insights

Dave Ramsey addresses the skepticism surrounding the 88% ownership statistic. At 01:42, he states, “So where you read this was some kind of conspiracy theory bullcrap.” He dismantles the notion by clarifying that mutual fund companies like BlackRock, State Street, and Vanguard manage funds on behalf of millions of investors, rather than controlling the companies they invest in.

Moreover, Ramsey remarks on the reliability of the 88% figure, expressing doubt about its accuracy while acknowledging that a significant portion of stock ownership lies within these mutual funds. He points out that including other major firms like Fidelity could bring the ownership percentage even higher, yet underscores that these mutual funds’ primary role is to manage diversified portfolios for investors, not to exert control over the companies in which they invest.

At 03:35, Ramsey touches upon the influence of BlackRock, noting, “the only one that’s ever been troublesome is BlackRock. And they got all up in the woke stuff and started pushing some of the companies to do some of the woke stuff, which has now backfired on them.” This highlights a brief foray into how these large asset managers might attempt to influence corporate policies, though Ramsey argues that such efforts have limited impact on share prices and retirement account values.

Conclusion

In wrapping up the discussion, Ken Coleman concurs with Ramsey’s assessment, reiterating that the concentrated ownership claim is not a cause for alarm. At 04:09, he remarks, “It makes sense to me. Thank you for bailing me out.” Ramsey reinforces this sentiment by assuring listeners that the structure of mutual funds does not equate to individual companies being controlled by a handful of asset managers.

The episode concludes with a reminder from George Kamel to connect with investment professionals through SmartVestor, emphasizing the network’s commitment to providing informed and reliable financial advice.

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Notable Quotes

• Dave Ramsey [01:42]: “So where you read this was some kind of conspiracy theory bullcrap.”
• Dave Ramsey [03:35]: “The only one that’s ever been troublesome is BlackRock. And they got all up in the woke stuff and started pushing some of the companies to do some of the woke stuff, which has now backfired on them.”
• Ken Coleman [04:09]: “It makes sense to me. Thank you for bailing me out.”

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Key Takeaways

• Mutual Fund Dynamics: Large mutual fund companies manage diverse portfolios on behalf of millions of investors, ensuring that no single entity controls the majority of stock shares.

• Dispelling Myths: Claims about concentrated stock ownership by a few firms are largely unfounded and often stem from misunderstandings of how mutual funds operate.

• Investment Implications: For individual investors, the structure of mutual funds offers diversification and reduces the risk associated with concentrated ownership, reinforcing the importance of diversified investment strategies.

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For those seeking personalized investment guidance, connect with a SmartVestor professional through RamseySolutions.com or visit the link in the show notes.

Transcript

[Dave Ramsey]

Foreign.

[George Kamel]

This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor Today's question comes from Aaron in Delaware.

[Ken Coleman]

I read recently that 88% of shares in the stock market are owned by three major companies, BlackRock, State street and Vanguard. Should this be concerning or affect how we invest? Well, I have to plead ignorance on the first part of that question. I don't know where you read that. I've not seen that. I don't know if it's true. I'll cede my time to the gentleman to my left. But it should.

[Dave Ramsey]

The gentleman from Tennessee.

[Ken Coleman]

That's right. It should not be concerning.

[Dave Ramsey]

It's not.

[Ken Coleman]

Because it doesn't concern me.

[Dave Ramsey]

Because they're not companies.

[Ken Coleman]

That's right.

[Dave Ramsey]

They're mutual fund companies. They manage mutual funds. They don't own the shares. I do, and Ken does. And any of you that have a 401k does. Okay. State street and Vanguard and Blackrock are three of the largest mutual fund families. Each mutual fund has 90 to 200 stocks in it and millions of customers. So I own shares of Vanguard because I buy Vanguard mutual funds. Sometimes I own shares of State street because I buy fund families that are State street run and operated. So These are not BlackRock and Vanguard and State street do not have the ability to tell any of these companies what to do because they own shares in them. Because they don't really own the shares. Their customers own the shares. A mutual fund is where you put money in. I put money in, somebody else puts money in, and 40,000 other people put money in in their 401ks. It's mutually funded. Then that money is used to buy good, for instance, growth stocks. If it's a growth stock mutual fund. Vanguard manages funds like that. State street manages funds like that, but they're not the owner of the stocks. So wherever you read this was some kind of conspiracy theory bullcrap. Okay? Three companies own 85% of America, and it's the Trilateral Commission. Oh, crap. Stay off of that stuff. Get off the Internet if that's all the only garbage you can read. Okay, so I don't know if the 88% number is correct. I doubt it's that high, but it's very high. Blackstreet, State street and Vanguard. That's. If you put Fidelity in there, you're getting pretty close to most of the. See, most shares on the stock market are not owned by individual investors. They are owned by mutual funds that individual investors invest in. And so when I buy shares of Vanguard Fund, I am buying into 80 to 200 companies that they bought into. But they're not controlling these companies. I am, I'm the owner as a member of the, as an owner of the mutual fund. So it's not like if an individual person owned each of these companies and they all owned the stock. Yeah, that would be concerning. That three people controlled 60 or 70% of the stock market. That would be very concerning. But it's not true. Which is helpful the fact that that's not a fact. So even if these mutual fund companies do control north of 50%, which they may very well, if you put in Fidelity, you probably would get there. I mean, the only one that's ever been troublesome is BlackRock. And they got all up in the woke stuff and started pushing some of the companies to do some of the woke stuff, which has now backfired on them. And so they were trying to say, we own so many shares of this. You should do so. And so few of the companies caved to that. And then some of the other companies, some of the other mutual funds have come around, gone the other way now. So there's a bit of an offset in that junk. But it really didn't have much to do with money. It had more to do with cultural philosophy than it did actually affecting your share price or the value of your retirement accounts. So answer is, should this be concerning or affect how we invest? Answer is no. For all of those reasons. Makes sense.

[Ken Coleman]

It makes sense to me. Thank you for bailing me out. It's nice. Nice to have you to my left.

[Dave Ramsey]

No troubles. That's what I'm here for. Been doing it a while.

[George Kamel]

Thanks for tuning in to Ramsey. Everyday millionaires. Need help with your investments? Connect with a smartvestor [e-mail] smartvestor or click the link in the show notes. Ramsey Solutions is a paid non client promoter of participating pros. Learn [e-mail] SmartVestor.