Sequestration is just the latest instance of investors trying to stay on top of economic news that could impact their portfolio.
As they did amidst uncertainty over the fiscal cliff, so, too, no doubt, are investors reaching out to their personal financial advisor about sequestration. Knowledge is the key benefit investors take from working with a professional advisor, according to ongoing Millionaire Corner research.
A new Gallup poll indicates that a majority of Americans do not know enough about sequestration to have an opinion on whether it will be a good or bad thing for either the country or themselves personally.
Sequestration refers to the across-the-board mandated spending cuts that took effect March 1. The political climate, which Affluent investors told Millionaire Corner last month, is the news story most impacting their economic outlook, has been further roiled by this issue, with the White House and Republican lawmakers offering differing scenarios over the impact of the cuts to programs ranging from the military to education and health care.
Those investors who have formed an opinion about sequestration tilt toward negative evaluations, Gallup found. A previous survey conducted before the March 1 deadline found that 45 percent of Americans (vs. 37 percent) wanted Congress to pass legislation to avoid it, while a majority thought that the cuts would have a negative impact on the economy “this year.”
Sequestration is just the latest instance of investors trying to stay on top of economic news that could impact their portfolio. Over the course of the fiscal cliff debate, Affluent investors surveyed by Millionaire Corner said that television and the Internet were the primary media sources for their fiscal cliff news, followed by newspapers and the radio. But more than five-in-10 were neutral on whether they believed this information to be reliable.
The wealthier the household, the higher premium they put on financial knowledge, our research has found. more likely they would consider their financial knowledge to be “extremely important. Nearly one-fourth of Millionaire households consider themselves very knowledgeable about financial products and investments (compared with 8 percent of Mass Affluent households with a net worth between $100,000 and $1 million), while 62 percent consider themselves at least fairy knowledgeable.
For Millionaire investors who consult with them, financial advisors play a key role in gaining this knowledge. Three-fourths of respondents told Millionaire Corner that financial advisors improve their knowledge of investing.
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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.