Americans with money in the stock market are allocating more of their dollars toward everyday essentials instead of investing to budget for decades-high inflation, according to a new survey.
One in four retail investors are putting less into the stock market so they can cover expenses like groceries, gasoline and housing, according to a survey of US adults conducted by Wells Fargo & Co. Furthermore, they’re so nervous about their investments that 42% want to cash out, and nearly a third would deplete their IRA or 401(k) accounts if they could do so without tax penalties.
The findings underscore how Americans are struggling to keep up with persistently high inflation, forcing many to load up on credit cards and chip away at savings. And steep interest-rate hikes from the Federal Reserve have shaved trillions of dollars in value from US stocks, pummeling retirement funds.
Half of male investors and 27% of women say they’re “doomscrolling,” or continually checking their investments on their phone when the market is down. Two thirds say lower inflation would make them feel more confident -- indeed, the latest consumer price data was met with an exuberant rally when it came in softer than expected.
The survey, which polled 2,000 adults from Sept. 21-27, found that lower interest rates, cheaper gas prices and an end to the war in Ukraine would also bolster sentiment.
On the flip side, the findings showed that 18% of investors are cutting back in some areas to take advantage of lower stock prices. More than half pointed to entertainment, while others sacrificed personal spending, such as clothing; restaurants; travel and vacations; and online subscriptions.
This article was provided by Bloomberg News.