Spending on big-ticket items used to be a badge of honor on Wall Street. A response to the question, “How was your weekend?” would typically be:
“I bought a new car.” Or, “Oh I decided to fly down to Miami last minute.”
But it appears if those days are over — at least for now. Wall Street’s luxury spending really fell off after the financial crisis – and it’s still not back. I polled about a hundred bankers, traders, analysts and portfolio managers and the new trend on Wall Street is — are you ready for this? — saving.
“I enjoy saving,” said Roger, a sales trader. “I like watching it add up.”
A whopping 80 percent of the people I surveyed said they prefer saving over spending.
What’s more, they said they’ve increased their pace of saving, stashing more money away since their last bonus than in previous years.
“I’m going to keep saving,” Rachel an analyst said. “Who knows how many rainy days are ahead?”
The No. 1 reason they’re ratcheting up their savings is fear.
“I’m going to keep saving … Who knows how many rainy days are ahead?”
“I’ve been spending a lot less these days,” Michael a sales trader said. “A lot of it has to do with job security. You never know when the music is going to stop.”
Beyond job security, there’s the little matter of the presidential election. The majority of people believe there are pros and cons to both candidates. With Clinton, they see a much more stable market, but with increased regulations that could slow growth. And Trump’s proposal of lowering taxes is appealing to most, but he also brings a headline risk. There’s some worry about currency movements, macroeconomic instability and the uncertainty of new trade agreements.
Even if the next president cuts taxes for the wealthy, hoping for a trickle-down effect where the more money they save, the more they’ll pump back into the economy, don’t expect Wall Street to play that game.
Hand them more savings, via taxes or whatever, and Wall Street will stash it away. They want to save as much as they can.
The luxury private jet market is expected to drop by 5 percent this year, while the yacht market has a zero-growth outlook for 2016, according to the latest Bain Luxury report.