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5 ETFs to Cash In On Record High U.S. Household Net Worth

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The net worth of American households touched a fresh all-time high in the second quarter of 2021 powered by a faster-than-expected recovery of the U.S. economy from the coronavirus-led crisis. On Sep 23, Fed reported that household net worth jumped $5.85 trillion or 4.3% in second-quarter 2021 from the first quarter to reach $141.7 trillion.

Year over year, the net worth of Americans jumped 19.6% on easy comparison. The value of equities (which is mainly responsible for the rise in household net worth) increased nearly $3.5 trillion while the value of real estate held by households rose around $1.2 trillion. On a flip side, debt also swelled. Household debt grew 7.9%. Consumer credit grew at an annual pace of 8.6%, while mortgage debt was up 8%.

Easy money and fiscal policies that propelled the stock prices and consumer savings drove the net worth. The U.S. stock market hovered around the record high level. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — rallied 4.6%, 8.2% and 9.5%, respectively.

Moreover, the small-cap specific Russell 2000 advanced 4.1% and the mid-cap centric S&P 400 gained 3.3% in the second quarter. All these reflect a broad-based rally in second-quarter 2021 and added to the consumers’ net worth.

We believe the trend may slow down a bit in the coming days as the Fed taper talks and the actual move may slower........

© Entrepreneur

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