Despite Record Highs, Investors Pull Back




Is it fear of inflation, or worse, fear of recession? Is it fear of more global trade wars? Is it fear of impeachment hearings for the President?

Something is preventing wealthy investors from expressing enthusiasm about the state of the stock market, which was rollicking through the end of April.

The expression of investing interest in Spectrem’s Investor Confidence Indices did not match the optimistic nature of the stock market overall, which saw record high closing numbers for both the NASDAQ and the S&P 500 on April 23. While the Spectrem Confidence indices were filed prior to that close, the numbers in those two market registers were inching toward the record highs throughout the month.

Both Millionaires and non-Millionaires showed less interest in investing in April, and in some cases the percentages are demonstrable. While there were drops in individual components of investing, such as stock and individual bond investing, there was also a notable increase in those Not Investing defined as investors who do not plan to put more money into their investments for the coming month.

Here is a comparison of investors based on specific segmentation:

Millionaires vs. Non-Millionaires

  • Often, economic indicators which prompt Millionaires to increase investments cause non-Millionaires to pull back. In April, both Millionaires and non-Millionaires turned away from investing in most categories.
  • Among Millionaires, investing percentages dropped in all categories except stock investing, which increased from 31.7 to 36.4 percent. But stock mutual fund investing dropped more than 14 percent, individual bond investing fell by almost two-thirds, and those Not Investing climbed to 34.9 percent, the highest percentage in 2019.
  • Non-Millionaires decreased investing participation in all categories except for bond mutual fund investing, which rose by a single point to 9.9 percent, which is greater than Millionaires investing of 8.5 percent, an occurrence which is rare in the Spectrem indices.
  • Non-Millionaires not investing climbed back up above 50 percent to 50.4 percent, after dipping to 37.9 percent in February.

Men vs. Women

  • Whatever causes females to pull away from investing, it happened in April. Percentages among women in all categories fell, and those Not Investing climbed to 57 percent, the highest percentage in over a year.
  • Among male investors, interest in stock investing rose slightly, to 34.8 percent, but all other categories saw a drop, and those Not Investing matched the stock investing number at 34.8 percent,
  • Just as did with Millionaires and non-Millionaires, bond mutual fund investing was more popular among females (10.5 percent) than males (8.5 percent), and females rarely express a greater interest in any category of investing than males.

Republican vs. Democrat

  • Investors who vote Democratic pulled away from investing in a big way in April, and interest in stock investing was cut nearly in half, from 33.3 percent to 17.9 percent. There was more than a 10-point drop in stock mutual fund and individual bond investing, which actually fell all the way to 0 percent.
  • With the exception of stock investing, Republican also saw a drop in interest from March, and interest in stock mutual fund investing fell by 13 percent to 28.41. Individual bond investing was cut by almost two-thirds to 3.41 from 9.18. among Republicans, those Not Investing climbed more than 9 points to 324.95.

Working vs. Retired

  • Oddly, retired investors were more optimistic through April than were working investors. Retired investors showed an increased interest in both individual stock and bond mutual fund investing, although they also saw a rise of more than 10 percentage points in those Not investing, to 54.7 percent.
  • Among working investors, every category of investment product saw a decrease, especially in stock mutual fund investing, from 40 percent to 28.7 percent. Individual bond investing was cut in half, to 4.2 percent (and again, below retired investors for the first time in years). Among working investors, 32.9 percent said they would not add to their investment accounts, a rise of 10 percent in that category.   



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