As Americans adjust their spending habits in a rapidly changing economy, they are building cash reserves at an unprecedented rate.
The Bureau of Economic Analysis reported on May 29th that the personal savings rate hit a historic 33% in April. To put that into perspective, it’s the highest number since the Bureau started tracking personal savings in the 1960s.1
Economists are struggling with the question, “When will consumers be confident enough to start spending some of that cash stockpile?”
Optimists say the stockpile was due to “forced savings.” Staying home has led to less spending overall, on everything from clothes to commutes. As soon as restrictions loosen, that money could flow back into the economy.
On the other hand, pessimists may say that until virus fears drop and the unemployment rate improves, consumers will continue to conserve cash as a response to tremendous economic uncertainty.
We believe there is some merit in both schools of thought. We will be watching the personal savings rate alongside other economic indicators to see what, if any, long-term trends emerge.
If you’d like to discuss your personal savings rate, please give us a call. At Epic Capital, we’d welcome the chance to hear about any changes you have made in recent months and how to adjust your plan for the future.
Few terms in personal finance are as important, or used as frequently, as “risk.” Nevertheless, few terms are as imprecisely defined. Generally, when financial advisors or the media talk about investment risk, their focus is on the historical price volatility of the asset or investment under discussion.
As Americans get their grills and beach chairs ready for the July 4th holiday, the stock market and the weather across much of the country have both been on heaters. Stocks and bonds continue to effectively navigate a complex policy landscape shaped by evolving trade dynamics, geopolitical tensions, and fiscal stimulus. The market’s resilience in … Continue reading “Market Update – America Gets Record High Stock Prices for Its Birthday”
Birthdays may seem less important as you grow older. They may not offer the impact of watershed moments such as getting a driver’s license at 16 and voting at 18. But beginning at age 50, there are several key birthdays that can affect your tax situation, health-care eligibility, and retirement benefits.
During times like these when geopolitical headlines can be unsettling for investors, we at LPL Research like to remind ourselves of one of our key investing principles. Markets have always faced challenges —ranging from geopolitical conflicts and economic downturns to natural disasters, political upheaval and health crises. These events often trigger short-term volatility and shake … Continue reading “Why Long Term Investing Beats Selling in Volatile Times”
Are you concerned about the inheritance taxes your heirs may have to pay? Then you may want to consider creating charitable lead trusts.
Epic Capital provides the following comprehensive financial planning and investment management services: Learn More >