Inflation and the possibility of a stock market collapse According to a poll conducted by personal finance software company Quicken, these are the two greatest dangers to the US economy and the financial well-being of Americans.
According to a press statement from Quicken, the Menlo Park, California-based company, conducted an online survey earlier this month with a sample of 1,200 US consumers aged 18 to 74 from the Cint Consumer Network.
The study indicated that almost three-fourths (71%) of respondents identified inflation as their primary worry, followed by new COVID-19 variations, supply chain disruptions, and a stock market meltdown.
On that last issue, the study found that 52% of respondents believe a stock market catastrophe would occur within the next five years. According to the press release, 58 percent of that group expects an impending stock market catastrophe to harm their finances.
However, not everyone considers a possible crash as a terrible thing. Certain Americans have seen the financial gains achieved by more aggressive investors since the day of the 2008 stock market collapse and are now hoping to profit from the next one.
According to the press release, 52% of self-described “aggressive” investors believe the 2008 meltdown helped them financially, compared to 18% of self-described “conservative” investors.
Additionally, 71% of aggressive investors, compared to 20% of cautious investors, feel that a future stock market fall will benefit them financially.
A sizable proportion of respondents who predict there will be a crisis over the next five years – 35% – agree that they are waiting for a crash to invest some more money.
A large proportion of younger adult generations — Millennials and Gen Z – perceive the advantages of a future stock market catastrophe as well.
According to the poll, 41% of Gen Z and 36% of Millennials agree to wait for a stock market fall before investing their additional funds.
According to the press release, another 30% of Gen Z and 28% of Millennials wait for a market meltdown before investing.
Surprisingly, retirement and job security, which are often identified as important concerns for Americans, plummeted to the bottom of the list of topics that respondents to a study said were most concerning in 2022.
Americans Preparing For A Market Impact, How?
According to the Quicken poll, many Americans adopt an active stance with their investments, adapting for potential volatility.
Over a third, 37% of respondents said they had adjusted or intended to modify their asset allocation in 2022 in anticipation of a stock market catastrophe.
These respondents include the richer segments of society and the younger Millennial and Gen Z generations.
According to the press release, 49% of persons with earnings between $200,000 and $499,000, 73% of people with incomes more than $500,000, 49% of Gen Z, and 46% of millennials have already made or intend to make modifications to their asset allocation in preparation for a crisis.
41% of poll respondents want to do nothing in the event of a market meltdown, while 42% intend to purchase equities. And 26% said that they are likely to invest in an alternative asset such as cryptocurrency or NFT.
Case of Trust
According to the Quicken poll, Americans across generations are more inclined to accept their financial advisor’s advice in the event of a market crash. At the same time, Gen Z and Millennials are more likely than previous generations to seek guidance from family and friends or social media. The following is a breakdown of the numbers:
- 49% are likely to follow their financial advisor’s advice.
- 29% are inclined to follow their family or friends’ advice.
- Sixteen percent would seek guidance through social media. (Twenty-one percent of Gen Z and 29 percent of Millennials would seek assistance from social media outlets.
“Americans are suffering the effects of inflation daily, which is why it’s on everyone’s mind,” said Quicken CEO Eric Dunn.
“It’s critical to understand how economic developments, such as inflation and an unstable stock market, affect our everyday lives and to have a hold on your money so that you’re prepared for the uncertainty ahead,” Dunn said in a news statement.
Quicken’s study was conducted in conjunction with the US Federal Reserve’s recent statement that it would accelerate monetary policy tightening by hiking interest rates three times this year, beginning in March.
According to a recent Reuters survey, the median projection for the end of the year in mid-January is between 0.75 percent and 1.00 percent.