The end of 2018 was rough for stock market aficionados and attentive investors. By December, the market was in complete tumble stage, and the Dow Jones Industrial Average and other indices reflected that.

January was a recovery month. By the time February rolled around, the market had stabilized, and through the shortest month of the year, the DJIA and other indices returned to high numbers and more importantly stable numbers.

Spectrem’s Investor Confidence Indices reflected the return to steadfast and reliable market results with increased enthusiasm for investing.

Among all investors, individual stock investing intentions rose from 22.80 percent to 30 percent among all investors. That intention to invest returns to the 30 percent or above range which was last reached in September but was standard for the index for the first four months of 2018.

The best news for advisors is that the renewed interested in stock investing was across the board in terms of the wealth of the investor.  Among Millionaires, stock investing rose to 37.3 from 29.5 percent in January, and the non-Millionaires increased stock investing to 22.6 percent from 15.7 percent.

Stock Mutual Fund stayed static from January, but was above 30 percent for three consecutive months after an unusual dip to 26.8 percent in November.

All of the stock investing enthusiasm stems from a DJIA which stayed above 25,000 in January, and the index was fielded in mid-February when the DJIA approached 26,000 again.

There was also a significant growth in Bond Mutual Fund investing, up to 14.80 among all investors, the highest level since April of last year. More importantly, the percentage of investors Not Investing, those investors who have no intention of adding to their investable asset outlay in the coming month, dropped to 33.6 percent, also the lowest level since April of 2018.

Here is a comparison of investors based on specific segmentation:

Millionaires vs. Non-Millionaires

• Usually, there is a imbalance between the investing decisions of Millionaires and non-Millionaires on a monthly basis, but in January, enthusiasm was reflected in both segments, especially in the stock investing and bond mutual fund investing. There was a much larger change in those Not Investing among non-Millionaires, down to 37.9 percent from 47.9 percent in January. Not investing among non-Millionaires reached 55.2 percent in November, so there has been a 15 percent decrease in three months in those not participating further in the stock market.

Men vs. Women

• Something certainly sparked the motivation among female investors in January, because every one of their specific indicators rose notably.
• Examples include individual stock investing, which rose from 10.1 percent to 29.5 percent. Bond mutual fund investing jumped from 5.1 percent to 14.8 percent, and those Not Investing dipped from 46.5 percent to 31.8 percent, lower than any such percentage in all of 2018.
• The Millionaire index among females rose from -14 to 5, and the affluent index rose from –13 to -1.
• Among males, there were actual drops in stock and stock mutual fund investing. The increase among males was in Cash and bond Mutual fund investing, and those Not Investing remained at 34.6 percent, with little change from the month before.
• Still, the overall index for Millionaire males rose from 1 to 13, and for affluent males it rose from 3 to 7.

Republican vs. Democrat

• Republicans and Democrats agree that February was a good month for investing.
• Stock investing rose among investors of both parties, as did bond mutual fund investing. Also, those Not Investing dropped among both types of investors. Among Democrats, those Not Investing dropped from 46.67 percent to 30 percent, a huge dip in a key indicator.
• The most notable component related to political affiliation is that Democrats recorded a positive index number for both Millionaires (1 from -12) and Affluent investors (0 from -15). Millionaire Republicans jumped their index from 8 to 19 in one month, hitting a number last reached in August of 2018.

Working vs. Retired

• There are few occasions when retired investors show greater enthusiasm for investing than working investors. Retired investors tend to have more stable investment intentions, so when their interest rises more than the intentions of working investors, it is an important moment.
• Among retired investors, stock investing rose from 20.4 percent to 27.1 percent. Stock Mutual Fund investing among retired investors rose to 30.6 percent from 25.8 percent. Individual Bond Investing also rose from 3.2 percent to 9.4 percent. Most importantly, those Not Investing dropped from 53.8 percent to 37.7 percent, a level lower than any reached in 2018.
• Working investors had an increase in stock investing as well, from 24.4 percent to 29.8 percent.

 

©2019 Spectrem Group