Nearly one-third of Affluent investors cannot forecast where the Dow will close at the end of the year.
Considering market volatility in the past month, where do Affluent investors project the Dow Jones industrial average will close at the end of the year?
Too bad it’s been taken for the critically acclaimed new film about an aspiring jazz drummer, because “Whiplash” would be an excellent title for a film about the market over the last couple of weeks. Think of that plot’s twists and turns and highs and lows! The Dow lost more than 1,100 points between Sept. 18 and Oct. 15 before recovering about half of those losses in a three-day surge. On Thursday, it came close to having its best day of the year before late-breaking news about a New York doctor had contracted the Ebola virus shaved the Dow’s 300-point gain to 217 points for the day.
Investors’ wary investment mindset may be fueled in the short-term by this weekend’s stress test for European banks as well as the two-day meeting next week of the Federal Open Market Committee, from which investors will be looking for signs over the Federal Reserve’s next course of action regarding its economic stimulus program.
On Dec. 31, 2013, the Dow ended at 16,576.6, an all-time high, and its biggest annual gain since the late 1990s. But Affluent investors can be forgiven if, given the market’s volatility of late, they are uncertain whether the Dow can surpass that performance, according to a Spectrem’s Millionaire Corner wealth level study of non-Millionaire households with a net worth of at least $100,000 (not including primary residence).
When asked where the Dow will close at the end of the year, the highest percentage of Affluent respondents, 31 percent, said they did not know.
The second-highest percentage, 21 percent, believe it will close between 17,001 and 17,500, while 17 percent forecast a year-end close on par with last year, between 16,501 and 17,000.
Across age groups, the youngest non-Millionaire respondents, ages 35 and younger, were the most likely to be at sea over where the Dow will close at the end of the year. Almost half (45 percent) allowed that they did not know. Gen Xers and late Baby Boomers ages 45-54 were the next age group most likely to shrug their shoulders at the question of where the Dow will end up at year’s end.
Similarly, the least wealthy in this wealth demographic (those with between $110K-$499K) were more likely than their wealthier counterparts to say they don’t know about where the Dow will close.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.