Experts differ on what to do with their savings during the summer months.
And the numbers also speak for themselves: In some years, the stock market does very well during June, July and August. Other years, the stock market is rained out, such as the disaster year 2022.
The savings economist explains
News24 therefore interviewed Philip Scholtzésavings economist at online bank Avanza.
– In recent years, the summer market in Sweden has mixed and given. The Stockholm Stock Exchange has given an average of two percent in the summer months over the past five years. But the spread is large, from -8 percent in 2022 to 9 percent up in 2020, says Philip Scholzé.
Tough summer financially
After more or less two years of recession, Swedes value the summer holidays highly.
This summer, Swedes will spend over SEK 18,000 on travel. At the same time, 20 percent are considering taking out a private loan to afford the holiday, according to a calculation from County insurances.
Then it can feel close at hand to skip saving in the summer.
Concerns on the stock market this summer
In addition, the world’s worries will continue to plague stock savers this summer.
– The stock market hates worry and uncertainty. With ongoing wars, recessions and difficult-to-predict interest rates, the macro economy continues to greatly influence the stock market. But this summer there will also be quarterly reports from the listed companies and then we will see how they have managed to navigate and perform in the current environment, says Philip Scholtzé.
Global funds do better in the summer, usually
Traditionally, savings in global investments have been safer than on the Stockholm Stock Exchange.
– In the last five years, the world index has been more generous with the return during the summer months.
But this year it is not certain. First, the Riksbank will announce the interest rate on June 27, and almost no one suspects that the interest rate will move. In July, interest rate announcements will come from both the European ECB and the American Fed, which could have an effect on the markets.
The richest think the opposite
But declining market capitalization does not necessarily mean that you should stop investing. Large equity investors take the opportunity to buy more shares during the summer, especially if the prices are lower then, like last year.
– If I look at how our private banking customers, they have at least three million in total savings, acted during last summer, they net bought shares and funds. That during a period when the Stockholm Stock Exchange retreated. Historically, it has been value-creating to invest when the market is doing worse, says Philip Scholtzé.
Should you stop saving in the summer?
So in the end – should you stop saving monthly to spend the money on the holiday abroad?
– Stopping monthly savings can be one of the biggest mistakes you can make as a saver. We say that
two people save SEK 2,300 each per month for 20 years and get an average annual return of 7
percent. Those who save consistently every month then reach almost SEK 1.2 million, while those who
pausing their savings every three years will accumulate just over SEK 800,000, says Philip Scholtzé.
Another variation
Another way to save is a savings account, which still yields more than 3 percent at most banks that offer it.
Should one perhaps switch from monthly savings on the stock market to putting the money in the savings account during the summer months? The trick is to top up both accounts over time, says Philip Scholtzé.
– I think you should have continuous monthly savings for both the stock market and the savings account. Then you don’t have to worry about timing and create a habit that does good over time.
The good things of life
But that does not mean that one should live ascetically.
– A good personal economy has a healthy and even balance. Using 90 percent of your income to live here and now and saving the remaining 10 percent for the future is a great rule of thumb.
Read more about finance:
What does Sweden’s stingiest man, Günther Mårder eat at midsummer?
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Ordinary families now pay over 10,000 for food – a month
The expert: What is the best form of savings – and why is it ISK?