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    Fidelity survey says financial discipline stronger 5 years after crisis

    One post-crisis change: People are putting more in emergency funds.
    Dennis A. Crumrin
    One post-crisis change: People are putting more in emergency funds.

    The frugality and investing discipline that the 2008 financial crisis imposed on Americans appear to have led to permanent changes in behavior on money matters, according to a survey by the nation’s second-largest mutual fund company.

    Spendthrift ways are unlikely to again become as pervasive as they were before the crisis, Boston-based Fidelity Investments concluded Wednesday in releasing results of its ‘‘Five Years After’’ survey of nearly 1,200 investors. Positive behaviors that now appear to be entrenched include saving more in 401(k) plans, paying down debt, and taking greater care to invest wisely.

    ‘‘These tend to be very sticky decisions, because you begin to budget and spend around a higher savings rate,’’ said John Sweeney, an executive vice president at Fidelity. ‘‘People are taking control of their financial lives, and control breeds confidence.’’


    Survey participants were interviewed over two weeks in February, nearly five years after the government-brokered rescue sale of Bear Stearns to JPMorgan Chase. That event, in March 2008, is regarded as a tipping point for more tumultuous upheavals that followed, including the September 2008 collapse of Lehman Brothers, which the government allowed to fail.

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    Housing prices plunged, unemployment spiked, and stocks tumbled more than 50 percent from the October 2007 high to a March 2009 low. Not until last month did the Dow Jones industrial average return to its pre-crisis high. Key survey findings include:

     Fifty-six percent reported their financial outlooks changed from feeling scared or confused at the beginning of the crisis to confident or prepared five years later.

     Survey participants estimated their household had lost 34 percent of the value of their total assets, on average, at the low point of the crisis. Thirty-five percent experienced what they considered to be a large drop in income, and 17 percent said at least one head of their household lost a job.

     Forty-two percent increased the amounts of regular contributions to workplace savings plans such as 401(k)s, or to individual retirement accounts or health-savings accounts.


     Fifty-five percent said they feel better prepared for retirement than they were before the crisis. However, among those who reported they continue to feel scared, just 34 percent said they’re better prepared.

     Forty-nine percent have decreased their amount of personal debt, with 72 percent having less debt now. Just 31 percent of those who indicated they’re still scared reported they have reduced debt.

     Forty-two percent have increased the size of their emergency fund. Among those self-reporting as scared, 24 percent have a bigger emergency fund than they had pre-crisis.

     Seventy-eight percent of those saying they’re prepared and confident said the actions they’ve taken are permanent changes in their behavior. Fifty-nine percent of the scared group said they’ve made permanent changes.

    Sweeney said the survey findings and Fidelity’s own data on customers’ actions during the financial crisis suggest investors have become more engaged in managing their portfolios. People also have become smarter about managing investment risks and avoiding unsustainable debt levels.


    One of the most pronounced changes has been growth of savings invested in bonds and bond mutual funds. Bond funds have attracted more than $1 trillion in net deposits since 2008, while money has been pulled out of stock funds for the past six years. Bonds typically generate smaller long-term returns than stocks, but with less chance of short-term losses.

    Year-to-date data show cash has finally begun flowing into stock funds, as bond funds continue to attract money. Sweeney noted that stocks historically have generated larger returns than bonds, making them a better option to offset inflation. But he acknowledged bonds are likely to continue attracting retiring baby boomers and others seeking reliable income.

    ‘‘We’re going to see a long-term systemic shift into bond funds as the population ages and the need grows to reduce risk in their portfolios.’’

    The survey was conducted by GfK. Fidelity was not identified to the 1,154 survey participants as the sponsor.