Money·2 min read

What a Hot Stock Market Means for Your Wallet

Jul 1, 2019

Wall Street is on a serious hot streak. Indexes (aka groups of investments used to ballpark how the broader market is doing) are breaking records and taking names. See: the NASDAQ and S&P 500. Here’s what that could mean for your wallet:

You’re beating inflation. And then some. Inflation = the increase in costs over time. It’s also a big reason to invest instead of stuffing money under the mattress. When the stock market’s hot, the money you invest can grow even faster. This can take some pressure off future you to invest more of your paycheck. Thanks to a little thing called compounding. Or when your money starts making money. Gains on gains on gains.

Related: The Best Investment Account for Every Money Goal

You might feel better about that big upcoming purchase. During a bull market, stock prices are generally going up. Consumer confidence typically follows. Bigger investment account balances motivate people to spend, from eating out more often to booking vacation flights.

Wages might go up. When people can afford to spend more, company revenues go up. That boosts the economy. And increases the likelihood that there’ll be more cash money to go around. Meaning a raise could be in your future.

Related: Why Low Unemployment Is Good for Your Wallet

theSkimm: If you’ve looked at your 401(k) recently, you’re probably feeling pretty good at how far you’ve come this year. But keep some perspective – the market can be unpredictable. So don’t make any bold moves, like investing a lot more money when prices are high. Or overdoing it with big purchases you’re not ready to buy just yet. When it comes to investing, slow and steady tends to win the race.

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