Interest rate increases and inflation fears are causing a slight decline in the American Institute of CPAs’ Personal Financial Satisfaction Index in the first quarter of the year, despite positive news in the stock market and promises of tax reform.
The AICPA’s Personal Financial Satisfaction Index saw a 1.6 point decline in Q1, while a related measure, the Personal Financial Pain Index, increased 3.2 points. However, the AICPA pointed out that despite the negative shifts, the Personal Financial Satisfaction Index, or PFSi, remains in positive territory, at 17.5 points.
“The recent stock market rally has put an exclamation point on the post-recession bull market, with investors seeing significant gains both quarter-over-quarter and year over year,” said Leonard Wright, a member of the AICPA’s Personal Financial Specialist Credential Committee, in a statement. “With stocks at or near historic highs, it’s a great opportunity for Americans to take a look at their asset mix and consider rebalancing their portfolio and locking in recent gains.”
There were more positive trends in a March telephone survey of more than 1,000 adults by Harris Poll on behalf of the AICPA. It found that the 64 percent of Americans who were satisfied with their personal finances outnumbered the 35 percent who did not feel satisfied by nearly a two-to-one margin. However, there was still room for improvement there, with only 13 percent of the respondents saying they felt completely satisfied with their personal finances while 16 percent said they were not at all satisfied.
Forty-one percent of the respondents indicated they have felt an improvement in their personal financial satisfaction over the past year, with 14 percent saying their personal financial satisfaction has improved substantially and 27 percent believing it improved slightly. Meanwhile 10 percent saw a slight decline in their financial satisfaction, while 8 percent perceived a substantial decline. Another 40 percent said their financial satisfaction remained about the same compared to a year ago.
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