Since everyone is worried about the uncertain future, everyone tighten their belts, and cut down costs. This means that there will be more savings, because less money is spent.
How about investing that money? Well, that is where the problems come. Because, people save, not because they have more, but because they fear. To invest, you have to be brave and take risks. You cannot invest, out of fear. Hence the chances that those saved money being invested is very low.
Even if the saved money is invested, the chances are that the investment would be on low risk elements. Because, more often than not, people would wish to have the capability to liquidate their investments, at their will. That hinders high return investments.
Hence, even though the savings might be higher, in a slow economy, investments are very low.
However, remember that,
Fortune favors the brave
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