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Feeling Down

A study finds that the stock market’s volatility concerns Americans

Americans are letting the stock market get them down. That’s one takeaway from a new study by the American Institute of CPAs (AICPA). The report, which measures Americans’ happiness with their personal finances, found that people were feeling blue, and the stock market was one of the main reasons.

The study — the AICPA’s Personal Financial Satisfaction Index — measures consumer satisfaction as two components: pleasure and pain. As Marketwatch reports, Pleasure is derived from things that increase consumers’ assets, like more jobs and a robust stock market. The Pain portion is driven by the opposite: Things that hurt finances, like inflation and tax increases. For five straight quarters, the AICPA report had found that consumers were increasingly feeling satisfied with their finances. Then, in the fourth quarter, the pleasure index suddenly decreased. The number one reason cited by consumers was the volatility of the stock market. Not coincidentally, during the fourth quarter of 2018, the S&P 500 and the Dow Jones Industrial Average fell 14 percent and 12 percent, respectively.

It’s not surprising that people are worried about the stock market. It’s hard to sit back and watch as the ups and downs mess with your money. That’s why we’ve told you over and over again not to do that. Remember that investing in the stock market is a long-term game. Stocks will go up and they will go down. Know that over the long haul, you’re better off just leaving your investment plan in place and not fretting over the week-to-week fluctuations.

Chris O'Shea

Chris O'Shea