Between unrest in the Middle East and the earthquake and tsunami in Japan, world events have been dominating the headlines, but the Economy and the Political Climate are still very much on investors’ radars. In Millionaire households, the Economy is perceived as the Most Serious Threat to Achieving Financial Goals. Affluent households ($500,000 and up of net worth) view the Political Climate as the Most Serious Threat.
Millionaire households, at 25% slightly up from last December when this question was last posed to investors are slightly more concerned about the Economy than Affluent households (22%, unchanged). Affluent households are equally concerned about the Political Climate, while 19% of Millionaire investors—down from 23% in December—see this as the Most Serious Threat to realizing their financial goals.
While these two issues have long dominated investor concerns, other issues have gained traction in recent months. Ten percent of Affluent households, up from 6% last December, cite Unemployment (still hovering at around 9%) as the most serious impediment to achieving their financial goals. Eight percent of Millionaire investors, unchanged, also ranked Unemployment as the next Most Serious Threat. These are the highest readings for this issue since March 2010.
Concern about Market Conditions was virtually unchanged since December, with 7% of both Millionaire and Affluent households identifying this issue as the Most Serious Threat, while 7% of Millionaires and 5% of Affluent investors named Health Related issues, an increase of 5% and 3%, respectively. Inflation, at 5% of both Millionaire and Affluent households, down slightly from December, is considered the least serious of these issues.
It will be interesting to keep an eye on the already polarized Political Climate, which is in danger of becoming even more fractious as lawmakers debate the Obama administration’s response to the disaster in Japan, the unfolding Libyan crisis, rising oil prices, and other events that could have a severe impact on the Economy.