Coronavirus Impact On Financial Health
The 2020 pandemic has been in the news and a part of daily life for the majority of 2020. Many people know of someone or have a close family friend or relative that has been diagnosed positive for the coronavirus. This has caused a global health concern that has resulted in drastic measures taken to preserve the health and well being of U.S. residents. With such a huge impact on our personal health, what attention has been paid or changes observed to our financial health?
Spectrem Group has been researching the financial impact of the coronavirus on wealthy investors since the news of the outbreak first occurred. Investors went from not be very worried about the pandemic in March, to very concerned about it later in the summer. These changes likely came from the corresponding stock market decline. Despite a significant recovery, the concerns remain the same, showing that investors are not easily lured into a false sense of security due to stock market movements, but they are rather looking at a bigger picture, or they see the overall economy operating well below normal capacity.
When the pandemic first hit, many people were unsure how this situation would impact the economy. In February, when the pandemic first hit, individuals gave a ranking of a 60.94 on a 0-100 scale of the impact of the coronavirus on the economy, with 0 being no impact, and 100 being a huge impact. That number peaked in April of 2020 at an 87.09.
Now with investors having some time to let the dust settle on the economy, stock market and their own investments, it is important to know how they feel about their own financial well-being since the start of the coronavirus. Nearly two-thirds (65 percent) of investors feel their financial well-being is the same now as it was since the start of the coronavirus. Seventeen percent think their financial well-being is worse, and 17 percent feel it is better.
That sentiment is echoed by most investor segments with the exception of those investors with a net worth of $15 million to $25 million and Millennials. Thirty-seven percent of investors at the highest wealth levels feel their financial well-being is worse since the start of the coronavirus. In contrast, 28 percent of Millennials feel their financial well-being is better since the start of the coronavirus.
Investors largely feel that their financial well-being is stable when compared to prior to the pandemic. However their outlook for the next 12 months of their lives is a slightly different picture. Fifty percent of investors felt their financial situation would be strong a year from now than currently in February, 2020. In August of 2020 that number has dropped to 45 percent. Only a slight decline but a notable one. The next 12 months will be very telling from an economic, health crisis and election standpoint. Wise investors will communicate and consult with their trusted financial professional throughout this time to ensure they are responding properly to the events of the time.