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SOURCE STA Wealth Management
Consumers holding on to cash, not paying off credit cards
93% want Fed to end QE
HOUSTON, Oct. 15, 2013 /PRNewswire/ -- Public confidence in the economy remains low with many pointing towards the partisan gridlock in Washington as a major factor in the nation's stalled economic recovery process, according to money management company STA Wealth Management's inaugural quarterly financial survey. With QE unexpectedly extended through the year, a stagnant economy and a government shutdown, the majority of people surveyed were pessimistic, holding onto cash and not paying off debts like credit cards to get by.
"General uncertainty in where our economy is headed is high, and as a result, consumer confidence is low and people are holding onto cash," said CEO Lance Roberts. "This uncertainty has also killed the long-term investor. Our clients are very risk adverse but also want to make bold moves while the markets continue to rise."
Market Confidence Dips
Based on the results of the survey, consumer confidence in stable markets played a significant role in their investment decisions. Over half of the survey's respondents (53 percent) said they have low confidence in the strength of the economy.
"There are many factors that contribute to overall negative feelings towards our economy. At at a time when unemployment is at a virtual standstill and a debt ceiling fight looming, people are just not sure how this story will end," Lance said. "All this hesitation is causing investors to be very cautious of where they are putting their money and what their next steps might be."
With half of respondents indicating their uneasiness in the country's economy, the majority of survey participants (83 percent) are deciding to hold on to cash rather than invest in stocks or bonds.
"Companies aren't hiring, Bernanke is sending mixed signals and Congress is a mess. As a result, people are deciding not to invest in stocks, bonds and mutual funds and are holding onto cash," Lance said. "The future looks cloudy and uncertain, and people are wary to throw their money at a market that burned them in the past."
Survey participants have a clear sense of apprehension as the country struggles to emerge from the 2008 financial crisis and the following recession. Participants indicated that the current economy has influenced their decision to keep their cash (42 percent) rather than pay off credit card bills (28 percent).
The survey, which was distributed two weeks before the failed budget negotiations in Congress, showed strong disapproval of Washington. Forty-six percent of respondents believed partisan politics in the Capitol had a high impact on the economy.
In addition to negative feelings towards Congress, individuals also wanted to end the Federal Reserve's Quantitative Easing (QE) program at a staggering 93 percent.
"Whether it is a dislike of Congress and the White House or the Fed, one thing that was very clear is that people want the economy to grow, and they don't see any artificial intervention in the markets as the solution," Lance said. "The financial markets need to readjust without the Fed's hands in it. It is then that people will begin to rebuild their trust in our economic viability."
About STA Wealth Management
STA Wealth Management is an independent RIA, which currently manages in excess of $550 million. The firm was founded in 2004 by Lance Roberts and Michael Smith and later joined by Luke Patterson. The primary focus of the firm remains risk adjusted return investing for individual investors.
Contact: Nicolle Gallo - email@example.com or (609) 915-6078
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