Circumstances Impact Investor Outlook



While it is true that most investors give thought to their personal financial situation on a regular basis, their attention to household finances has never been sharper than it is today.

The global economic reaction to the coronavirus has caused everyone to consider what they have, what they need and how they are going to maintain their personal financial situation for the near future. For some, such consideration is a matter of reflection, while for others, some major shuffling is taking place.

Spectrem’s monthly examination of investor confidence and outlook has undergone radical shifts since the start of 2020. The Spectrem Affluent Investor Confidence Indices saw huge drops in both the confidence of investors in the practice of investing and in the outlook of investors about the future of their personal financial situation.

The Spectrem Household Outlook takes into consideration what investors think about four components of their personal financial picture: household assets, household income, company health and their opinions about the economy as a whole. Putting a number to their feelings about those components allows Spectrem to create an overall Outlook rating, and in May, that rating was only slightly better than it was in April, when investor outlook was at its lowest point in years.

For comparison sake, in April, the Spectrem Household Outlook registered an overall number of -24.50. That was not only the first negative Outlook figure since February of 2013, it was the lowest such figure since February of 2009, when the world was still pulling itself from the Great Recession.

In May, the overall Outlook rose to -16.90, an improvement overall that came about because investors generally had a slightly better outlook for their household assets, household income and the economy as a whole. Where their Outlook did not improve was in consideration of their company health.

The Outlook for company health fell from -23.60 to -24.40. While the economy is making incremental improvements as it learns the full extent of the dangers of the coronavirus, many companies are finding it difficult to get back to full capacity of both output and income, and people who work for those firms or invest in those firms are battling to keep their faith that mattes will improve over time.

Looking ahead to June, it has been eight years since the Outlook has recorded a negative rating three months in a row. Should the outlook remain negative in the next month, this will mark a very low level of investor outlook over an extended period of time.       



©Spectrem 2020

Keywords: investors, advisors, Index, outlook, Spectrem, confidence, company health