Coronavirus stimulus checks ‘used to buy stocks’
Stock trading activity saw huge rise in some income brackets during the week stimulus checks were issued
When you purchase through links on our site, we may earn an affiliate commission.Here’s how it works.
A large number of Americans used coronavirus stimulus checks to trade stocks, a new study has revealed.
The study byEnvestnet Yodleetracked how 2.5 million Americans were spending money since the start of the pandemic. During the week in mid-April when most stimulus checks were issued, more than 80% of people who received money increased their spending.
Notably, much of that spending went towards stock trades. Americans earning between $35,000 and $75,000 per year, who were eligible for $1,200 in stimulus payments, increased stock trading activity by 90% compared to early April.
Trading activity
Those receiving the full stimulus amount weren’t the only ones buying stocks that week. Americans earning between $100,000 and $150,000 annually traded stocks 82% more value in stocks compared to the prior week, while those earning more than $150,000 annually increased trading by 50%.
The increase in trading activity coincided with a boost in the number of brokerage accounts being opened, especially among young Americans.Charles Schwabreported that a record 609,000 new trading accounts were opened in the first quarter of 2020, whileRobinhoodexperienced a 300% year-over-year increase in trading activity in March.
Bill Parsons, chief of data analytics at Envestnet Yodlee, believes the spike in trading is a sign that the pandemic is forcing people to refocus on their finances. “Covid is causing conversations among family members…about what to do with their money,” says Parsons. “These discussions are becoming very real and people are taking action.”
Are you a pro? Subscribe to our newsletter
Sign up to the TechRadar Pro newsletter to get all the top news, opinion, features and guidance your business needs to succeed!
Michael Graw is a freelance journalist and photographer based in Bellingham, Washington. His interests span a wide range from business technology to finance to creative media, with a focus on new technology and emerging trends. Michael’s work has been published in TechRadar, Tom’s Guide, Business Insider, Fast Company, Salon, and Harvard Business Review.
Best Usenet client of 2024
Best secure file transfer solution of 2024
Washington state court systems taken offline following cyberattack
