One result of COVID-19 restrictions: Americans are investing their extra cash in stocks

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More people are investing extra cash during the pandemic. About 20% of U.S. consumers invested in stocks or mutual funds at the end of 2020, up 16 percentage points from the middle of the year.

More Americans are opting not to stash away their disposable income or spend it on goods and services, but rather are investing it in the stock market.

In contrast, some 43% of consumers put money into a savings account in the fourth quarter of last year, down six percentage points from the second quarter. It also comes as many retail investors opened brokerage accounts on platforms like Robinhood during the GameStop rollercoaster stock saga GME, +2.54% driven in part by a subgroup on Reddit calledWallStreetBets.

A portion of Americans are finding themselves “with more disposable income and fewer ways to spend it” because of pandemic restrictions, he added.

 

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