Whether it was the result of the mid-term elections or the stock market slide in late November, investors across the wealth spectrum retreated from enthusiastic investing in November, according to the Spectrem Confidence Indices.
Both Affluent and Millionaire investors backed away from extending themselves in the stock market or in other investment products, according to the Spectrem indices. For the first time in the 14-year history of the Spectrem survey, investing in every category of investment product was reduced in November by both those with $500,000 in investable assets and those with $1 million or more in investable assets.
The Spectrem Millionaire Confidence Index (SMICI®) revealed a third consecutive month of reduced exposure to individual Stock investing, down to 30.6 percent of Millionaires, the lowest percentage of those increasing their investments since June. More dramatically, Millionaires pulled away from the safer form of stock investing, with only 35.1 percent investing more in Stock Mutual Funds, the lowest percentage since May of 2017. Cash investing, the safest form of product investing, dropped to 22.4 percent, an 8 percent decrease.
The same result occurred in the November Spectrem Affluent Investors Confidence Index (SAICI®), for those investors with $500,000 or more in investable assets. Stock Mutual Fund investing was halved, to 17.2 percent from 34.4 percent, reaching the lowest level of interest in the stock bundle investment since November of 2008, when the stock market was depressed due to the Great Recession.
Another indicator of investor enthusiasm, or lack thereof, is in those Not Investing, the category of investors who simply state their intention to maintain their current investment levels or decrease it. Among affluent investors, that percentage rose to 55.2 percent, the first time over 50 percent since July of 2017 and among Millionaires it reached 36.6 percent, the highest level since June of 2017.
Millionaires vs. Non-Millionaires
- Rarely if ever has there been such universal agreement among Millionaires and Non-Millionaires about how they are going to proceed in the coming month. Both segments reported reduced interest in increased investing across the board.
- Millionaires have been on a downward slope for the past three months, and interest in Stock investing has fallen from 41.1 percent to 30.6 percent in that time. Non-Millionaires had an enthusiastic month in September, with 34.5 percent extending themselves in Stock investing, but that has fallen to 19 percent, only the second time this year it has fallen below 20 percent.
- Among Non-Millionaires, Individual Bond investing fell to 3.5 percent, the second lowest rate of the year. It was at 9.2 percent just two months ago, when Non-Millionaires reported enthusiastic investing decisions in many categories.
Men vs. Women
- Hey, look! Men and women agreeing on something!
- The lower investment numbers from the overall indices are reflected by both male and female investors. Most telling was the 11-point drop among both genders in Stock Mutual Fund investing, and the 13 percent increase among Males Not Investing (44.4 percent, the highest level of non-participation in 2018).
- Females rarely report a higher percentage in any category than men, but 4.2 percent of females reported an intention to extend their investing in Real Estate, compared to just 2.8 percent of men.
Republican vs. Democrat
- Finally, some optimism. Republicans increased their interest in Stock investing, up to 32.4 percent, while also jumping their percent Not Investing to 50.48 percent, an increase of 17 percent. For the second month in a row, more Republicans than Democrats said they were Not Investing, and that is highly unusual for the Spectrem indices.
- Stock Mutual Fund investing among Republicans fell to 21.9 percent, its lowest level of the year. Again, Democratic investors reported a higher rate of investment than Republicans in Stock Mutual Funds (26.98 percent), and that also rarely happens.
- Cash investing among Republicans fell from 27.72 percent to 8.57 percent, marking the first time in 2018 that percentage was below 19 percent.
Working vs. Retired
- Working investors showed a bit of optimism with an increase in Stock investing, to 36.1 percent (a 2.5 percent increase) But all other categories saw drops among both working and retired investors, a 7 percent drop among working investors in Stock Mutual Funds and a similar decrease in Cash investing. The biggest decease among retired investors was in Stock Mutual Funds, to 19.1 percent, the lowest level of the year in the safer form of stock investing for the most conservative segment of investors.
©2018 Spectrem Group