A drop in October of the Spectrem Affluent Household Outlook is an indication of how market volatility impacts investor confidence.
One month after surging to a pre-recession high, the Spectrem Affluent Household Outlook dropped 11.60 points in October to 18.30, a six-month low, and the largest month-month decrease in 13 months. Despite the drop, it is the 20th consecutive month that the Outlook posted a positive reading.
The Spectrem Affluent Household Outlook is a monthly measure of Affluent investor confidence in four financial factors that impact their daily lives. Household Assets suffered the biggest loss at 19.2 points to 37.60, another six-month low. The Economy dropped nearly 11 points to 3.60, a 12-month low, while Household Income fell 10.4 points to 18.80, the lowest reading since last April. Company Health fell 6 points to 13.20, another 13-month low.
Year-over-year, the Spectrem Affluent Household Outlook is up 10.96 points. The survey was fielded before the market’s recent rebounds and is an indication of how market volatility impacts investor confidence. Between Sept. 18 and Oct. 15, the Dow Jones industrial average lost more than 1,100 points before recovering about half of those losses in a three-day surge.
Earlier this week, the Dow Jones industrial average closed above 17,000 for the first time since the beginning of the month, while the Standard & Poor’s 500 index erased all of this month’s losses.
The Affluent Household Outlook survey further breaks down Outlook measurement by Millionaire and non-Millionaire households. The Millionaire Household Oulook dropped nearly 10 points to 21.27, a seven-month low. Driving the decrease was increased concern over Economy, which dropped 20.08 points to 3.73, a 14-month low.
Household Assets lost 13.16 points to 44.78, a six-month low, while Household Income fell 10.66 points to 17.91, a seven-month low. Company Health gained 4.37 points to 18.66, a three-month high.
For the second consecutive month, the Millionaire Household Outlook posted a year-over-year loss, 1.21 points.
The Non-Millionaire Outlook likewise saw double-digit drops in three out of four components. Household Assets plummeted 26.34 points to 29.31, a six-month low. Company Health dropped 17.29 points to 6.90, a seven-month low. Household Income lost 10.01 points to 19.83, while the Economy ticked downward 1.39 points to 3.45, a three-month low.
Year-to-year, the Non-Millionaire Outlook is up 28.59 points.
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.