Investors Return To The Stock Market After A Summer-Long Hiatus
Investors have finally decided to celebrate the current success of the stock market.
After a summer of careful consideration about investing because of constant talk of tariffs and trade wars, investors in August decided they could jump into the stock market again with both feet.
The Spectrem Investor Confidence Index saw increases in August among both Millionaires and non-Millionaires, and the Spectrem Millionaire Investor Confidence Index (SMICI®) rose 12 points, the highest one-month increase in 4 ½ years. The Spectrem Affluent Investor Confidence Index (SAICI®) jumped 5 points in August, marking the first time the SAICI has seen any size increase since February.
The SMICI measures the confidence of investors with $1 million in investable assets, and the SAICI measures investors with $500,000 in investable assets Both indices saw a sizable dip in April and have been flat until the August survey, which occurred as the Dow Jones Industrial Average again reached an all-time high.
The August fielding took place August 20-24, 2018.
Here is a look at how the indices shook out based on segmented investors:
Millionaires vs. Non-Millionaires
- The improved Confidence Index in August is almost entirely created by enthusiasm among Millionaires, who reported an increased interest in Stock Investing, Individual Bond Investing, and a drop in those Not Investing in August to lowest level since February. Interest in Stock Investing rose among Millionaires to 41.1 percent after registering as low as 27.9 percent at one point during the late spring.
- Among non-Millionaires, the only actual increase was in Cash Investing to 17.4 percent, which is still historically low for those with less than $1 million in investable assets. There was actually a slight increase in those Not Investing in the coming month among non-Millionaires to just under 50 percent, but the over SAICI did increase anyway.
Men vs. Women
- Both men and women reported improved confidence in August and in some cases, the improvement was huge. Among Millionaire men, the confidence index rose from 11 to 23 in one month, and among Millionaire women, the confidence index rose from 1 to 16. That’s the highest mark for Millionaire women since February.
- However, in terms of the individual components of the confidence index, men showed greater investment interest than women, especially in Stock Investing and Individual Bond Investing. Among all male investors, Stock Investing rose from 25.0 percent to 35.3 percent, while interest among women was halved, from 30.0 percent to 15.7 percent. Among both men and women, those Not Investing in the coming month dipped slightly, showing a slight increase among all investors in getting back into the ball game.
- Both men and women reported an increased Household Outlook, both with very similar 5-point increases. However, women increased their Outlook on the Economy from -14.44 to 15.66, a 30-point improvement.
Republican vs. Democrat
- In a shocking turn of events, the Confidence Index increase in August is almost entirely caused by an increased interest among investors who profess to be either Democrats or Independent voters. Republicans, on the other hand, backed off in August.
- For example, among Democrats, the SMICI rose from 4 to 18 and the SAICI rose from -2 to 0. Among Independent investors, the SMICI rose from 4 to 24 and the SAICI went from 2 to 15. Those confidence numbers for Independents have not been that high since January of 2018.
- In terms of individual components, Independent investors increased their interest in Stock Investing from 25 percent of investors to 36.80 percent, while Republicans actually dropped from 31.70 to 27.30. Democrats increased their interest in Stock Investing slightly, from 22.90 to 23.90.
- In terms of the Spectrem Household Outlook, all political segments reported an increase, led by Democrats, who raised their Outlook from 5.71 to 12.68, still well below Republicans’ Outlook of 39.39. But Independents improved their Outlook on the Economy from -5.56 to 23.68, and Democrats improved their Outlook on the Economy from -37.14 to -16.90, which is still not a positive number.
Working vs. Retired
- Investors who are still working reasserted themselves in terms of the Spectrem Confidence Index in a big way in August, increasing their interest in Stock Investing, Individual Bond Investing, Real Estate investing and in terms of the Household Outlook.
- Retired investors went the opposite direction in almost every category.
- Stock Investing among non-retired investors increased by 5 percent to 38.8 percent, with a nearly identical drop among retired investors from 21.4 percent to 16.3 percent. That is the lowest percentage among retired investors during 2018.
- There was an increase in those Not Investing among both non-retired and retired investors, up to 54.4 percent among retired investors.
- The Outlook among non-retired investors rose to 39.34, more than 12 points. Retired investors reported a drop in their Outlook to 17.66, with reductions in their Outlook in Household Income and Household Assets.
- The SAICI and SMICI both rose for Millionaire investors, both non-retired and retired, including a 14-point jump among Millionaire retired investors.
©2018 Spectrem Group