Spike in savings -> investments (1.Viewing)

Covid has driven down expenses for average Canadians - therefore their percentage of savings compared to their net income has skyrocketed from around 3.5% to 15+%. I guess its all that vacation money they're saving.


Reference:
https://www.bcrea.bc.ca/economics/mortgage-rate-forecast/



And what is everyone doing with all that extra savings?


Reference:
https://www.cnbc.com/2021/04/09/inv...nths-than-the-previous-12-years-combined.html


The big question is, will this create a new breed of long term investors? Or will they just pull that vacation money right back out once lockdowns are over? (and thus driving a market crash - or at least a long term sideways trend?)

I agree. I think it is a combination of a lot of things. Our daughter in Hamilton was telling me, that as a result of working at home instead of 45 minutes each way daily commute to work, had reduced her gas usage by 100's of dollars a month, her insurance was reduced, clothes expenses, dining out and entertainment expenses are way down. She has paid off her credit cards and added to her savings. I think the situation is shared by millions of Canadians.

The increase in real estate costs and job losses will nullify these gains.
Small business (the cornerstone of our economy) has taken the brunt of the impact with the covid shutdowns. The trickle down effect of this will be felt for years to come.