The Spectrem Affluent Investor Confidence Index (SAICI)SM fell sharply to an almost mildly bullish -9 points, an 11 point drop from last month. The Spectrem Millionaire Investor Confidence Index (SMICI)SM dropped just two points to -1, indicating they are not as pessimistic about the economy.
These declines are not surprising considering the sharp drop in the Spectrem Affluent Household Outlook, which, at -10.7, is at its lowest level since February 2009. It most recently posted a negative reading (-8.3) in August 2010. Every Outlook component, including Household Assets, Household Income, Company Health, and the Economy, posted overall declines. The drops were most severe in Non-Millionaire Households, particularly in the areas of Household Assets and Household Income. While the Millionaire Outlook is at its lowest point since April 2009, these households at least expressed more confidence in each component than their Non-Millionaire counterparts.
“Investors are looking for some type of good news with the Economy, Assets, Unemployment or Company Health, but they just are not seeing it, and thus the Outlook has been dropping,” observed Tom Wynn, Director of Affluent Research for the Spectrem Group.
Despite an increase in Millionaires who chose this month to Not Invest, a response most likely attributed to the recent weak performance of the stock market, these households did express more investment confidence than the overall Non-Millionaire households, which saw a greater increase of those who chose to Not Invest. Millionaire investment in most of the surveyed categories was greater than in Non-Millionaire households.
Between incessantly negative news reports about the struggling economy and intensified partisan debates over whether to raise the debt ceiling before the current Aug. 2 deadline, the Economy and the Political Climate were perceived by investors to be the most serious threats to achieving their financial goals. Concern about the Economy’s impact has not been this elevated since February 2009. Concern about Inflation nearly doubled since last March. Millionaire investors were found to be more concerned than overall Affluent households about the Stock Market and the Political Climate.