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In times of economic turmoil, investing in interest-bearing financial assets is one way to reduce the impact of inflation. Although U.S. consumers have found their available savings decreasing in recent years, consumers are taking advantage of the sharp rise in the prices of many stocks, including major stock indexes, to decide to invest in funds and bonds. is increasing. Nevertheless, the proportion of consumers who invest their savings in this type of financial assets does not exceed 11%, highlighting a conservative investment profile.
About numbers
These are some of the findings detailed in New Reality Check: The Paycheck-to-Paycheck Report, a market research collaboration between PYMNTS Intelligence and LendingClub. Savings Deep Dive Edition examines consumers’ ability to save and save money in the current economic environment, especially when faced with large expenses.
Savings by financial assets
The study found that total U.S. savings averaged nearly $11,200 per person in September 2023, which was down about 2% from a year earlier, net of inflation.
When it comes to consumer preferences for how to allocate these savings, the average consumer puts 23% of their store toward education funds or retirement funds, the largest of all financial assets considered. It holds 11% in stocks or bonds and about 2% in cryptocurrencies. The remaining amount was allocated to various forms including checking accounts, business investments, and other forms of financial assets.
This composition highlights the conservative approach of U.S. consumers to savings. For reference, the S&P 500 index grew over 15% from September 2022 to September 2023, and the Dow Jones index grew over 11% over the same period, but if you decide to invest your savings in bonds Only 1 in 10 U.S. consumers do. Or stock. Nevertheless, consumers who are able to make ends meet and are in a healthier financial situation are allocating up to 15% of their savings to this form of financial assets, which is the same as living paycheck to paycheck. , nearly twice as many consumers as having trouble paying their bills.
Around half of domestic investors have experienced an increase in the value of their portfolios in each class of financial assets, including bonds and stocks, up from 31% at the time of the 2022 survey. Despite modest allocations to bonds and stocks, investors in recent years have seen growth during a period in which consumer prices soared above 3.4%, and investors have withdrawn money from savings to cushion the erosion of inflation. It highlights the tendency of consumers to seek financial benefits.
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