Almost half of Affluent investors say they are “very worried” about the upcoming election, according to a new survey conducted by Millionaire Corner. What issues are of the greatest concern?
The looming fiscal cliff is the greatest worry for 47 percent of Affluent investors. This is not just a domestic concern. A new BofA Merrill Lynch Fund Manager survey found that global investors now consider the U.S. fiscal cliff to be a bigger risk to their portfolios than the EU sovereign debt crisis.
Experts forecast that should the president and lawmakers be unable to reach an agreement regarding the Bush-era tax cuts, which are scheduled to expire at years-end, triggering in turn mandatory spending cuts, the country could slide back into a recession.
For 44 percent of respondents, their biggest concern about the election is that “the other party” will win. This is an indication of the partisan divide that many Affluent investors feel is responsible for the perceived inability or unwillingness of the President and lawmakers to work together to fix the economy, which is the primary campaign issue this year. These concerns were confirmed when lawmakers elected last week to break until after the November election without making any progress on the fiscal cliff front.
Almost one quarter (22 percent) of Affluent investors said that the election issue giving them the most worry is fear of a market crash. This, too, may be related in part to the unresolved fiscal cliff. They no doubt recall the bruising debt ceiling battle of August 2011, which led Standard and Poor’s to lower the country’s rating, which in turn, led to dramatic market swings.
Could there be a repeat if no deal is reached? At a news conference earlier this month, Federal Reserve Chairman Ben Bernanke cautioned that lawmakers were putting the U.S. economy in jeopardy. "If the fiscal cliff isn't addressed, as I've said, I don't think our tools are strong enough to offset the effects of a major fiscal shock,” he remarked. Earlier this month, Moody’salso warned that it would downgrade the country’s AAA rating one notch to AA1 should budget negotiations in Congress be unsuccessful.
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.