The stormy political climate may provide the 24-hour news channels, radio pundits, and late night comedians with ample fodder for news, commentary and jokes, but affluent investors are more focused on issues and events that have a direct impact on their portfolios. Only 4 percent of Affluent investors cited the Political Climate as a key factor affecting their investment plans, down from 13 percent in July, when this question was last asked. At that time, the Political Climate dominated news headlines as the debate over whether or not to raise the debt ceiling intensified in advance of the August deadline.
But Federal Reserve Chairman Ben Bernanke in testimony before the Joint Economic Committee this month, blamed that contentious debate for Standard & Poor’s decision to downgrade the U.S. credit rating and the subsequent volatility in the Stock Market, which 33 percent of Affluent Investors said is the primary factor impacting their investment plans. This is an increase of nine percentage points since last July and the highest level since April 2009.
The Stock Market has taken investors on a wild ride this year. Earlier this month, it regained nearly all of its losses for the year, but since August, the Dow has risen and fallen more than 100 points daily almost three-quarters (71 percent) of the time.
With unemployment remaining stubbornly above 9 percent, sluggish improvement in the labor market and concerns over a double-dip recession, 22 percent cited the Economic Environment as the factor most impacting their investment plans.
Concern about Retirement eased slightly since July. Eleven percent—down one percentage point—cited this issue as a factor affecting their investment decisions, while Household Income dipped two percentage points to 6 percent.
Of the overall Affluent investors, Millionaires were less focused on the Economic Environment, but in all other factors, their responses were virtually identical, with Millionaires slightly more focused on Stock Market Conditions, Household Income, and the Political Climate.
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.