Investors Investing Carefully
The Spectrem Investor Confidence indices indicate how investors feel about the direction of the stock market and other investment options in the coming month. In December, Millionaire investors indicated they are avoiding additional equity investments, perhaps responding to the impeachment of President Donald Trump or the perception that the bull market will someday reach its peak and begin a slow slide.
Each month, investors are asked whether they intend to maintain their current level of investing, and in December those not investing dropped significantly. However, there was a corresponding increase in cash investing among all investors, indicating that they were placing their additional investable assets in cash products as a reserve position rather than an active investing plan.
Non-Millionaires, however, were very enthusiastic about participating in the rising stock market. The percentage of non-Millionaires choosing to stay on the sidelines in December dropped to its lowest level in 3 ½ years, to just 34.8 percent of investors, but they also reported an intention to increase cash investing.
Here is a comparison of investing intentions as reported in the Spectrem Investor Confidence Indices for November based on specific segmentation:
Millionaires vs. Non-Millionaires
Millionaires backed away from individual stock investing, dropping interest in increased investing from 34.4 percent to 26.5 percent. That is the lowest level of interest in the individual stock market since December of 2008, when the Great Recession hit hardest.
But Millionaires indicated an intention to increase investments elsewhere, as those not investing fell from 34.4 percent to 25.5 percent, the lowest level of non-involvement since February of 2018. So, where did Millionaires intend to put their additional assets? They increased interest in cash by almost 10 percent, from 19.5 to 28.8 percent, and nudged increases in interest in individual bond investing. Those investment trends indicate a lack of interest in equities overall.
Non-Millionaires also increased cash investing from 20.5 to 24.6 percent, and increased interest in individual stock investing from 18.9 to 24.6 percent. They also jumped stock mutual fund investing from 23.8 to 27.1 percent.
Men vs. Women
Female investors backed away from all forms of stock investing while increasing their interest in bond and cash investing, and cash investing interest climbed almost 8 percentage points to 26.0 percent, nearly equal to that of males (27.3 percent).
While male investors backed away from individual stock investing mildly, they greatly increased interest in stock mutual fund investing from 27.1 percent to 35.7 percent. Males did back away a bit from individual bond investing, with interest in increased investing dropping from 9.6 percent to 7.1 percent, below female investing interest (11.5 percent.)
Overall confidence among males increased by 2 points to 2, but fell 1 point among Millionaire males from 7 to 6. Female confidence dropped precipitously among both groups, from 3 to -8 among all investors and from 11 to -8 among Millionaire females.
Republican vs. Democrat
Republicans showed strong interest in participating in the rising stock market numbers in December, with an increase in individual stock and stock mutual fund investing. The increase in stock mutual fund investing went from 24.21 percent to 30.86 percent. At the same time, Republicans increased their cash investing interest almost 4 points, and those not investing fell by 14 percent, from 48.42 percent to 34.57 percent.
Democrats responded in opposite fashion, pulling away from stock and stock mutual fund investing, but nearly doubled interest in cash investing, from 16.67 percent to 29.55 percent.
The overall indices among Democrats fell hard, from -3 to -10 among all investors and from 13 to -10 among Millionaires, a decrease of 23 points. Republicans increased their overall index numbers, from 1 to 3 among all investors and from 4 to 16 among Millionaires.
Working vs. Retired
Retired investors do not usually increase investing intentions notable from month to month, but they stated increased interest in both individual stock and stock mutual fund investing in December by approximately 5 points. In fact, retired investors expressed interest in increasing investments in all categories of products, and almost doubled interest in individual bond investing from 3.9 percent to 7.5 percent.
Meanwhile, working investors dropped interest in increased individual stock investing by 5 points, from 36.6 percent to 30.3 percent, but increased cash investing interest by a corresponding 5 percent, from 23.1 percent to 28.8 percent.
Both working and retired investors lowered their percentage of those not investing, and at 19.7 percent, the working investors not participating reached its lowest level since August.
©2019 Spectrem Group
Keywords: investors, advisors, Spectrem, investing, index, confidence, equities, cash