Insights + Resources

An Unprecedented Rush to Cash

Jul 3, 2020

People cramming coins into a piggy bank. Focus on eyes and ears.
When will consumers be confident to start spending some of their cash stockpile?

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.

Tags: , , ,

More Insights

Aug 5, 2020

One of my favorite Wall Street quotes regarding volatility is from Mark Twain, who said: “October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”

Aug 3, 2020

To some, the buying and selling of a company’s stock by corporate executive officers and directors can be an indicator of Wall Street sentiment. In July 2020, the ratio of companies with executive buying compared with executive selling touched 0.27 – the lowest level in nearly 20 years.1

Jul 31, 2020

Want to give your child or grandchild a great financial start? A Roth IRA might be a choice to consider. There are many reasons why starting a Roth IRA for a teenager may be a sound financial strategy. Read on to learn more about how doing this may benefit both of you.

Jul 29, 2020

In March, the Coronavirus Aid, Relief, and Economic Security (CARES) Act became law. It was designed to help Americans impacted by the COVID-19 pandemic.1 The new law offered investors a financial break. It gave people the option to skip required minimum distributions (RMDs) from traditional Individual Retirement Accounts (IRAs) and 401(k)-style plans in 2020. (Original … Continue reading “The I.R.S. Has Enhanced the 2020 RMD Waivers”

Jul 27, 2020

Lately, it can feel like each day brings a new headline about fluctuating market behavior. But amid the ups and downs of 2020, there may be some potential good news on the horizon. On July 16, 2020, the interest rate for 30-year home loans have fallen to 2.98%. In addition, the average interest rate for … Continue reading “30 Year Home Loans Fall to Historic Lows”

Insights + Resources >