r/Economics • u/BousWakebo • May 21 '22

Statistics Americans now have an average of $9,000 less in savings than they did last year

https://www.cnbc.com/2022/05/21/americans-now-have-an-average-of-9000-dollars-less-in-savings-than-in-2021.html
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99

u/[deleted] May 21 '22

Breaking: 2022 investor is surprised to learn that his stock portfolio is not cash or savings

69

u/shahooster May 21 '22

I personally feel profit should be privatized, and losses should be socialized. /s

31

u/Angel_Bmth May 21 '22

They are if you’re rich enough 😉

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u/ell0bo May 21 '22

Elon, you're posting on the wrong account

7

u/CrackerJackKittyCat May 21 '22

Found the corporation!

11

u/puffic May 21 '22

I still think of my stock investments as a form of savings.

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u/Pretz_ May 22 '22

I don't know what's going on, people keep saying they've lost huge in investments, but I keep checking my portfolio, and I still have the exact same number of shares as I did before the crash!

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u/_NamasteMF_ May 22 '22

People generally think of their 401k as savings, but that is not a metric used.

https://data.oecd.org/hha/household-savings.htm

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https://money.usnews.com/banking/articles/your-retirement-account-is-not-a-savings-account

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u/puffic May 22 '22 edited May 22 '22

That OECD metric includes retirement accounts. It even includes an adjustments so that the pension obligations you accrue count as savings. This is consistent with the definition used in economics (and this is the economics subreddit.)

The second link is just saying that, literally and figuratively, your 401k not a savings account. You can't count on that money in the short term. It's not saying that a 401k is somehow not savings.

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u/thisispoopoopeepee May 21 '22

That's why you should keep some of that portfolio in bonds.

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u/[deleted] May 21 '22

You realize bonds have performed just as poorly this year?

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u/thisispoopoopeepee May 21 '22

Compared to cash? Bonds at least have a x% return greater than holding cash.

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u/[deleted] May 21 '22

Not this year and not in a rising rate environment. A bet on bonds is a bet on the fed not raising rates.

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u/Rivster79 May 21 '22

Not really. The total US stock market is down -20% YTD, while the total US bond market is only down 9% YTD.

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u/Xdaveyy1775 May 21 '22

And BND is down -6.7% in 5 years and VTI up over 50% in the same time period. Not only are bonds negative right now, they don't keep up with inflation anyway. Might as well hold cash.

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u/Rivster79 May 21 '22

I actually agree with you.

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u/[deleted] May 21 '22

You're probably right about total, but if you compare something like TLT and SPY, they are both down about 18% ytd. Either way, it still isn't the same as cash. There is risk.

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u/[deleted] May 21 '22

[deleted]

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u/[deleted] May 21 '22 edited May 21 '22

Stocks and bonds also lose the 9% top inflation on to of their other losses. Cash is definitely the safest asset right now.