Market volatility continues to vex affluent investors, according to Spectrem Group’s latest monthly survey of investment preferences.

When asked how they intend to invest in the coming month, affluent respondents (with more than $500,000 of net worth and $1 million of financial assets, respectively) indicated for the second consecutive month that they would hold on the sidelines rather than invest.

Intention to invest in stock mutual funds, for seven months the most preferred investment vehicle among affluent investors, dropped six points to 34, a five-month low. Stocks only slightly increased 1.20 points to 31.60. The categories that posted the largest increases were in more conservative investments. Cash gained 4.80 points to 23.60, a 19-month high. Bonds gained 2 points to 8, an 11-month high. Similarly, bond mutual funds ticked upward .40 of a point to 14.80.

Spectrem Group breaks down affluent investment preferences by Millionaire and non-Millionaire households. Millionaires, generally more confident investors than their non-Millionaire counterparts, have not lost their enthusiasm for stocks. Intention to invest in stocks in the coming month gained 3.40 points to 36.2, a four-month high. But stock mutual funds fell 2.8 points to 41.7, a five-month low.

And though intention to invest in cash in the coming month dropped to a five-month low (20.5 points), bonds gained 3.2 points to 9.5, a three-month high, while bond mutual funds jumped 5.7 points to 20.5, another three-point high. Real estate climbed 3.2 points to 10.2.

Among non-Millionaire investors, the intention to invest in cash in the coming month is equal to that of stocks (26.8 points). This is almost a point drop from the previous month for stocks, but for cash represents an almost 13-point gain and a 22-month high.

The intention to told on the sidelines in the coming month rather than invest fell to five-month low for Millionaires and a six-month low for non-Millionaires. Year-to-year, there is a 3.50-point increase in Millionaires who intend to hold on the sidelines in the short term, compared with an 8.9-point drop for non-Millionaires.

 

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