Every three years the Federal Reserve does a survey of Consumer Finances. Between 2007 and 2010 it was found that median wealth, a household’s total assets minus debts, fell to $96,000 from $125,000. Also the median value of primary residences went from $207,000 to $176,000. The recession hurt households in all income brackets. The assets that suffered the largest losses were stocks. Sandra Block reporting for USA Today looked behind these obvious statistics to examine the psychological impact.
Surprisingly, the one-third of Americans who did not lose net worth are now more cautious and pessimistic than those who lost money. Overall families are more conservative with their finances preferring certificates of deposit over stocks and putting off retirement for 2 or more years. Wealthy families incurred greater losses on a percentage basis compared to all other income levels. Since the wealthy have most of their investment in stocks it stands to reason that 71% of them posted declines as opposed to the rest of the populous where only 60% were affected. For the 60% in the other income brackets, the decline in the housing value made the biggest impact.
Everyone should look at their individual situation for cause and effect. Were your losses caused by improper financial investing, a root cause of the recession, or merely collateral damage? It may be possible to recoup some of your losses.
Page Perry, is an Atlanta-based law firm with over 125 years of collective experience representing investors in securities-related litigation and arbitration. Page Perry’s attorneys are actively involved in counseling institutional and individual investors regarding their investment problems. For further information, please contact us.