The talk of an impending American economic recession receded in September, and investors responded by returning to a more active mode of investing as summer turned to fall.
The Spectrem Investor Confidence Indices for September recorded notably higher interest in equity investing among both Millionaires and non-Millionaires and a much lower investment in cash products, suggesting that investors again see positive signs that lead to investing again in the stock market.
The Millionaires and non-Millionaires nearly matched each other in September’s increased investing intentions, which is an indication that the high levels among the stock market indices were seen as positive signs by both wealth segments.
Here is a comparison of investors based on specific segmentation:
Millionaires vs. Non-Millionaires
It is not often that market conditions prompt both Millionaires and non-Millionaires to react similarly, but that was the case in September. Both wealth segments noted increased interest in individual stock and stock mutual fund investing, and reduced interest in investing in cash products.
Investing interest in individual stocks among Millionaires rose from 30.7 percent to 31.8 percent and among non-Millionaires it rose from 17.7 percent to 20.7 percent. These increases come after the month of August when interest in all forms of equity investing was at some of the lowest levels of the year.
Interest in stock mutual fund investing rose even more among both groups, and went from 33.6 percent to 39.5 percent among Millionaires.
The cash investing percentages are key indicators of investor confidence, and there has been a year-long movement toward increased cash investing as investors guard against market volatility and recession concerns. However, Cash investing in September was reduced to 22 percent of investors adding to those products, after peaking at 28.80 percent in the previous month.
Balancing this renewed interest in equity investing was a statement from a high percentage of both Millionaires and non-Millionaires that they would not be adding to their investment allocations in September. Those not investing rose from 29.2 percent to 34.9 percent among Millionaires and from 46.9 percent to 48.8 percent among non-Millionaires.
Men vs. Women
Male investors were much more impressed with the performance of the stock market in September than were female investors. While male investors showed increased interest in equities and lower interest in cash investing, female investors actually decreased their interest in the individual stock investing category, from 25.3 percent to 23.8 percent. The only category in which female investors increased their interest was in stock mutual funds, and that increase was very slight (28.9 percent to 29.7 percent).
In both gender segments, there was increased intention to not invest. Among men, it rose from 35.3 percent to 38.3 percent, and among women it rose from 41.0 percent to 46.5 percent.
Republican vs. Democrat
Republicans followed the male investment strategy path, with increased interest in both individual stock and stock mutual fund investing, and an increase in those not investing, from 29.07 percent to 32.99 percent. Democrats, meanwhile, expressed a much lower interest in individual stock investing, to 24.0 percent, with an increase in both stock and bond mutual fund investing, with a jump among stock mutual funds from 21.05 percent to 32 percent.
In both political segments, there was a slight increase in not investing, and among Democrats, that level reached almost 50 percent, to 46.67 percent.
It is perhaps noteworthy that among Independent voting investors, those not investing got even closer to 50 percent, at 48 percent, while reporting an almost 6 percent increase in investing interest in individual stocks.
Working vs. Retired
With all of the increased interest in individual stock market investing overall, most of that increased interest came from retired investors. Among working investors, interest was flat, moving from 31.3 percent to 31.6 from August to September. Among retired investors, interest rose from 17.2 percent to 21.2 percent in individual stock investing.
Otherwise, working investors increased their intention to invest in mutual fonds, both stock and bonds, while retired investors decreased interest in all other components of the index, most notably in individual bond investing, from 7.5 percent to 2.9 percent, the lowest level of the year.
Those not investing rose in both employment segments, from 57.0 to 61.5 percent among retired investors and from 21.4 percent to 25.6 percent among working investors.
©2019 Spectrem Group
Keywords: investing, investors, advisors, Spectrem, stocks, mutual funds, bonds, cash