Considering market volatility in the past month, it is not surprising that the highest percentage of Affluent investors surveyed in October by Spectrem Group report that “Stock Market Conditions” is the primary factor affecting their current investment plans.
Nearly four-in-ten (38 percent) respondents cited this factor as the one most affecting their investment plans, compared with 17 percent who responded “Retirement.” Only 1 percent of respondents responded that the “Political Climate” is having the biggest impact on their investment plans, which indicates that even with the midterm elections on Nov. 4, Affluent investors are most focused on market conditions than on continued government gridlock and how the election results will (if at all) change the balance of power.
The response to this survey question is in line with the drop in the October Spectrem Affluent Investor Confidence Index and Affluent Household Outlook (page 4). The wary investment mindset of Affluent investors is a reflection of the recent gyrations in the market. The Dow Jones industrial average lost more than 1,100 points between Sept. 18 and Oct. 15 before recovering about half of those losses in a three-day surge. On Oct. 22, the Dow was poised to have its best day of the year before breaking news that a New York doctor had contracted the Ebola virus shaved the Dow’s 300-point gain to 217 points for the day.
Analysts forecast more volatility. Over the weekend of Oct. 24, the European Central Bank reported that 13 Eurozone banks fell short in a stress test to gauge how they survive a financial or economic crisis. The scheduled two-day meeting beginning Oct. 29 of the Federal Open Market Committee rekindled speculation about the Federal Reserve’s next course of action regarding its economic stimulus program.
Of much less concern to Affluent investors where their current investment plans are concerned are the “Economic Environment” (6 percent) and “Household Income” (6 percent).