One positive outcome of COVID-19 restrictions: Americans are pouring their extra money into stocks

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Investing is becoming the new savings. More Americans are choosing not to save their disposable income or spend it on goods and services, but instead invest it in the stock market.

In the fourth quarter of last year, about 20% of American consumers invested in stocks or mutual funds, 16 percentage points more than in the second quarter, according to a report released Tuesday by the Conference Board, a nonpartisan think tank based in members. . In collaboration with Nielsen NLSN, + 1.26%, the expert group surveyed 500 Americans and more than 30,000 consumers from 67 other countries. In contrast, about 43% of consumers deposited money into a savings account in the fourth quarter of last year, six percentage points less than in the second quarter. This increase is helped by record interest rates that are driving consumers away from putting money in savings accounts and trying their luck investing in the stock market. That choice has paid off for many Americans who benefited from the record performance of the stock market last year, which continues to trend upward in the prospects for a third stimulus package. It also comes as many retail investors opened brokerage accounts on platforms like Robinhood during the GameStop GME rollercoaster stock saga, down -0.25% driven in part by a subgroup on Reddit called WallStreetBets. “The booms and busts of a few unlikely ‘meme stocks’ have made recent headlines, but the rise of individual investors tells a larger story about spending habits during COVID-19,” said Denise Dahlhoff, lead researcher by TCB. A portion of Americans are “with more disposable income and fewer ways to spend it” due to pandemic restrictions, he added. Home improvement was the only discretionary goods category of the six studied where consumers spent more in the fourth quarter compared to the second quarter. That is being driven in part by Americans moving into new homes and spending more time at home, the report noted. Related: ‘Losing Money Isn’t A Joke’: GameStop Drama Boosts Interest In Financial Education, Biggest Conclusion Of All