Affluent Retreat from Investing in October


One story captivated the headlines over the past month, and it had an effect on almost everything that happened in the United States.


When asked how they would be investing in the coming month, a significantly higher group of Affluent investors said they would be retreating to the sidelines (45.75 points, a gain of 15 over the previous month, when those who responded that they would not be investing had dropped to the lowest level since March 2012).


Intentions to invest in Stocks dropped 16 points to 24.70, the lowest reading since September 2011 and an unprecedented month-to-month drop in the more than nine years in which this investment preferences survey has been taken.


Stock Mutual Funds and Cash each dropped eight points to, respectively, 30.96 (a nine-month low) and 21.24, a five-month low.


Intention to invest in Bond dropped five points to 5.77, a six-month low, while Bond Mutual Funds and Real Estate each dipped one point to 12.96 (another nine-month low) and 7.30, respectively.


Spectrem’s monthly survey of Affluent investors breaks down investor preferences by Millionaire and Non-Millionaire households. Non-Millionaires are in an especially cautious mindset with “Not Invest” jumping 14.6 points to 61.9, a nine-month high. Stocks dropped 11.7 points to 15.4, the lowest reading since September 2011. Cash dropped 16.3 points to 11.5, a six-month low.  Bonds, Bond Mutual Funds and Real Estate each posted declines.


Fewer Millionaires said they would hold on the sidelines, although “Not invest” increased 12.7 points to 30.8, while Stocks dropped 17.5 points to 33.2, a seven-month low. Stock Mutual Funds fell 11.5 points to 39.4. Bonds and Real Estate dropped 4.2 points and 4.7 points, respectively, while intention to invest in Cash was unchanged from last month’s 30.3 points. Real estate edged up 0.7 of a point to 18.5.


Stock Mutual Funds is the one investment vehicle that remained steady, ticking upward at 0.1 of a point to 21.9