While Millionaire investors backed away from equity investments in September, non-Millionaires increased their participation in both conservative and speculative investment products, according to the Spectrem Investor Confidence Indices.
While the indices saw overall drops among both Millionaires and non-Millionaires in September, non-Millionaires increased interest in both equities and safety products like Cash and Bonds. The conflict between a lower confidence and increased participation shows just how confusing the current American economic picture is to investors.
The Spectrem Millionaire Investor Confidence Index, which measures the confidence of investors with $1 million in investable assets, dropped 13 points from 20 to 7, reversing the increased jump in August from 8 to 20. The Spectrem Affluent Investor Confidence Index, which measures confidence among investors with $500,000 in investable assets, dropped from 8 to 6 in September.
The September fielding took place Sept. 19 to 23, during which the stock market reached a new all-time high and President Donald Trump promoted new tariffs against China targeted at $200 billion in Chinese products.
Thus, the confusion.
Here is a look at how the indices shook out based on segmented investors:
Millionaires vs. Non-Millionaires
- While Millionaires and non-Millionaires are often at cross purposes when it comes to investing, rarely has the difference been as stark as it was in September. For example, Millionaires decreased their Stock Investing by 5 points to 36.6 percent, while non-Millionaires doubled their Stock Investing to 34.5 percent, their highest interest level since September of 2014. In the 48 months in between, Stock Investing among non-Millionaires reached 30 percent in only six months.
- In all categories, among conservative products like Cash Investing and the riskier categories like Stock Investing, non-Millionaires increased their participation. Millionaires dropped their interest in both Stock Investing and Stock Mutual Fund investing, and increased their Cash Investing by 7 percent.
- Those Not Investing, the investors who do not plan to increase their investing in the next month, increased among Millionaires to 35.1 percent, the highest level in that wealth level since June of 2017. Among non-Millionaires, those not investing fell to 37.8 percent, the lowest level since April.
Men vs. Women
- Cash and Bond investing went up dramatically among female investors, driving the indices down. Women increased their Individual Bond investing to 14 percent, almost a 10 percent jump, and Cash Investing went up to 25.4 percent. Not Investing also increased among women to 43 percent, their highest percentage of 2018.
- The men increased Stock and Stock Mutual Fund Investing but also increased Cash and bond Mutual Fund Investing. However, their level of Not investing fell to 30.9 percent, the lowest level since April, showing an increased interest in being involved in the market.
- Both men and women showed an improved Household Outlook, but women had a significant decrease in their Outlook on the Economy and Household Assets. The SMICI among women fell back into negative territory from 16 to -3, the Millionaire index among men also fell after a huge jump in August.
Republican vs. Democrat
- The indices for both Millionaire and non-Millionaire Democrats fell into negative territory in September, and the Millionaire index dropped 26 points, from 16 to -8. The Republican Millionaire index also dropped, from 19 to 10.
- Republicans increased their investing in all categories both conservative and speculative, and their percentage of Not Investing went to 32.0, the lowest percentage in six months. Democrat also decreased their percentage of Not Investing, to 46.15.
- In terms of the Spectrem Household Outlook, both Republican and Democrats reported an improvement, but Democrats are very unhappy about the Economy, dropping their rating to -30.77, compared to Republicans who rate it at 56.00.
Working vs. Retired
- Investors who are still working increased their participation in all individual categories, although Cash Investing (from 18.6 percent to 28.3 percent) and Bond Mutual Fund Investing (from 11.6 percent to 21.7 percent) saw the largest increases, driving the overall indices down.
- Retired investors increased their investments in both conservative and speculative categories, and dropped their percentage of those Not Investing below to 50 percent mark to 48.7 percent.
- The Household Outlook improved for both segments of investors, although the overall indices for Millionaire.
©2018 Spectrem Group