Investors Cite Political Issues as Their Leading Cause of Concern

Many investors blamed the political problems in Washington for their gloomy view about the economy, according to the latest retail investor sentiment report released by Charles Schwab.

The survey, conducted on December 22 that lasted for 35 days, revealed that that more investors (52%) are bearish or pessimistic about the market, compared to 41% last year.  The investors’ primary concern is the political disputes in Washington (28%), followed by market uncertainty because of market volatility (12%), fears of an upcoming correction (12%), and issues in the geopolitical or global macroeconomic sphere (11%).

The poll also found that the most bearish investors are those aged 40 to 55 and are retired. Moreover, a third of the people polled expect the next economic recession to take place in the coming year.

Around 39% of investors believe the new Congress will influence their investment strategy. The sectors most favoured by surveyed investors include information technology, communications, and health care.

Americans Need More Savings

Meanwhile, the longest US government shutdown in history has exposed the lack of savings of many Americans. Around 800,000 federal workers work without pay. To make ends meet, government employees and contractors drained their savings, spent on credit cards, and crowdsource funds.

The partial government closure also stressed the fact that only a few Americans have enough savings that would last for six months. According to a 2018 Bankrate survey, only 29% of Americans have enough emergency savings that could last for more than six months. Only 18% have adequate savings covering 3 to 5 months. This study eventually shows that less than half of the US population are prepared for emergencies.

In a 2017 report by employment website CareerBuilder, around 80% of US employees say they are living from paycheck to paycheck, 81% of them are women, and 75% are men.

Personal finance expert Dave Ramsey advise people to set aside $1,000 in savings before setting other financial goals.