As the stock market hits record highs, so too does America’s satisfaction with its finances.
“Explosive gains in the stock market and a decline in underemployment overcame rising inflation to advance Americans’ personal financial satisfaction to its highest level in the 24-year history of the AICPA’s Personal Financial Satisfaction Index,” AICPA, the advocacy organization for certified accountants, reported on Thursday.
The new high reached by the Q4 2017 PFSi eclipses the previous record reached last quarter and continues a run of seven consecutive quarters the PFSi has increased.
The PFSi is calculated as the Personal Financial Pleasure Index minus the Personal Financial Pain Index, with readings greater than zero signaling that Americans are feeling more financial pleasure than pain.
The Q4 2017 PFSi measured 26.9, a 1.2-point increase from the prior quarter.
The increase was due to a slight gain (1.3 points) in the Personal Financial Pleasure Index outweighing a modest (0.1 point) increase in the Personal Financial Pain Index.
The Personal Financial Pleasure Index, at 69.2, is up 1.3 points from the previous quarter, continuing its steady increase, setting a record for the fourth quarter in a row.
The PFS 750 Market Index, up 5.2 percent, experienced the largest increase over the previous quarter and was only somewhat offset by a 3 percent decline in Job Openings per Capita.
The other two pleasure factors, the Real Home Equity per Capita and the AICPA CPA Outlook Index, both increased slightly.
“Americans should continue to reassess their personal risk tolerance, and work with their financial advisers to determine how best to approach investment decisions in 2018,” said David Cherill, CPA, member of the AICPA Personal Financial Planning Executive Committee. “Many of my clients have more confidence than ever in the market, while others are scared to death and have already taken considerable gains off the table. The potential for volatility remains, but this market has thus far been immune to many of the factors that have resulted in large swings in the past.”