After posting a double-digit gain in January, the Spectrem Millionaire Investor Confidence Index (SMICI®) suffered a double-digit loss in February, dropping 10 points to 1, just barely keeping the Index in positive territory for only the second consecutive month.
The Spectrem Affluent Investor Confidence Index (SAICI®), which measures the investment confidence and outlook of households with $500,000 or more in investable assets, dropped three points to -7, the 10th consecutive month the Index has been in negative territory.
The drops in both indexes are reflected in the Affluent Household Outlook, Spectrem Group’s monthly survey of attitudes toward financial factors impacting their daily lives. Among Affluent investors, confidence this month was especially lacking in Household Income and the Economy.
Another indication of why the indexes declined in February can be found in our monthly survey of investment preferences. More Millionaire investors than last month said they planned to stay on the sidelines and not invest. The decline in those expressing an intention to invest in stocks was the largest since December 2008.
News about the economy was mixed in February. The month began with news that for the first time in three years, the U.S. economy had contracted in the fourth quarter. The economy added 187,00 jobs, but the unemployment rate ticked upward to 7.9 percent. With a fiscal cliff deal reached at the beginning of the year, investors braced themselves as lawmakers grappled with the automatic spending cuts scheduled to take effect on March 1. Meanwhile, a report issued this month found existing home sales increased in January.