This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

We're Saving Only 16% of Our Income

NEW YORK ( BankingMyWay) -- Is 16% enough to save for college, marriage, retirement -- with some left over for the proverbial rainy day?

It better be, because that's the amount Americans are stashing away in savings every month, according to a study from the investment management firm Blackrock (BLK).

The company says that more financial consumers are looking to protect their money in an investment environment they consider to be "high risk."

"U.S. investors continue to hold a sizable percentage of their assets in low- or no-return cash investments and expect to remain in this holding pattern with no major shift out of cash over the next year," Blackrock's Global Investor Pulse Survey says. "Despite rising concerns about meeting investment goals, most investors are stuck in place with current portfolio allocations."

That's good news for banks, which are seeing big inflows of cash in savings vehicle accounts such as certificates of deposit and money market accounts.

But it's not such great news for bank investors, who are earning only 0.203% on the average one-year CD, and only 0.101% on the average money market account.

That makes it harder to save money for big life events, but even so investors are adamant about keeping investment risk at arms-length, Blackrock notes. All told, 48% of all individual investment assets are in cash, with 18% in stocks and 7% in bonds.

Half of U.S. investors in the study say the equity markets are just too risky, and roughly the same number say they "don't know" the best ways to build income through their financial investments.

That's likely why so many Americans are opting for the "sure thing" in putting so much of their money into bank savings vehicles and their notoriously low investment returns.

"[Investors] are understandably unnerved and are holding too much of their money in assets that are earning them nothing or that will lose value if interest rates rise," says Robert S. Kapito, president of BlackRock.

Additional data from Blackrock reveals why so many Americans are reluctant to bet on the stock market: They're burdened by debt and bills. In fact, the average U.S wage earner earmarks 49% of his or her take-home pay to paying bills, compared with 40% for the rest of the world.

Americans seem particularly anxious about rising health care costs, a concern that could rise give the rocky start of Obamacare this month, followed by job security and the "state of the U.S. economy," which continues to be precarious five years after the near collapse of the U.S. banking system and resulting recession.

That could explain why so many Americans are avoiding risk and keeping their cash out of harm's way.

That said, being saddled with low interest rates via CDs and money market vehicles doesn't translate to big investment returns either.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.30 -0.92%
FB $118.03 0.51%
GOOG $697.51 0.74%
TSLA $222.94 -4.00%
YHOO $36.00 -0.01%


Chart of I:DJI
DOW 17,666.88 -84.03 -0.47%
S&P 500 2,051.44 -11.93 -0.58%
NASDAQ 4,729.3330 -33.8910 -0.71%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs