Stock market surge boosts financial satisfaction

By Samiha Khanna

Continued growth in the stock market, rising home equity, and declining underemployment and loan delinquencies helped keep Americans’ personal financial satisfaction near its all-time high during the second quarter of 2019, according to the AICPA’s Personal Financial Satisfaction Index (PFSi), released on Thursday. The PFSi measured 37.8 for the second quarter, 0.8 points (2.1%) below last quarter’s record high. It is 8.4 points (28.8%) higher than it was this time last year.

“Other variables such as historically low unemployment and positive wage growth have also contributed, but the average person seeing the U.S. stock market up over 20% this year has an outsized effect,” said Michael Landsberg, CPA/PFS, a member of the AICPA’s Personal Financial Planning Executive Committee. “It also doesn’t hurt that, to cap off the second quarter, the Dow Jones posted its best June since 1938.”

The PFSi is calculated as the difference between two subindexes: the Personal Financial Pleasure Index and the Personal Financial Pain Index. The Pleasure Index comprises four factors: real home equity per capita; job openings per capita; the PFS 750 Market Index, a proprietary stock index; and the AICPA’s CPA Outlook Index. The Pain Index also comprises four factors: underemployment, loan delinquencies, personal taxes, and inflation.

In the second quarter, the Pleasure Index was 74.1, an incremental increase (0.1 points or 0.1%) from the previous quarter, and just under its all-time high of 75, a record set in fall 2018. Gains in the PFS 750 (up 2.5 points or 2.7%) and home equity (up 1.3 points or 1.8%) were offset by declines in job openings (down 2.4 points or 2.8%) and the CPA Outlook Index (down 0.9 points or 1.8%).

The Pain Index increased by 0.9 points from the previous quarter, a 2.5% increase driven by a 4.8-point increase (15.5%) in inflation and a 1.5-point (3.1%) increase in pain from personal taxes on income, capital gains, and property.

Although Americans’ personal financial satisfaction remains close to its recent record high, many people may be concerned about talk of another recession. CPAs also have concerns, one potential signal of those worries being the 0.9-point decrease (1.8%) dip in the AICPA CPA Outlook Index, which measures expectations of CPA executives for the year ahead for their companies and the U.S. economy.

Even in light of such speculation, the average person should focus on staying the course, Landsberg said.

“History would indicate that it is likely a recession is coming. However, not even the best prognosticators know for sure whether that will be tomorrow or in five years,” he said. “Therefore, focus on rebalancing and having the appropriate amount of equity exposure in your portfolio. If you work with a CPA financial planner then he or she will likely already be making necessary tweaks depending on your long-term goals and priorities.”

More information about the PFSi is available at

Samiha Khanna is a freelance writer based in North Carolina. To comment on this article or to suggest an idea for another article, contact Ken Tysiac, the JofA’s editorial director, at

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