Jumping In With Both Feet



The bull market, which has been on an unceasing run for most of Donald Trump’s presidency, shows no signs of pulling up any time soon. Investors who may have been cautious about the growth in stock market prices, believing a downturn has to come someday, are forgoing their apprehension and diving into investing in equities to take advantage of the market as much as possible.

Every month, as part of its Investor Confidence Index survey, Spectrem asks investors an open-ended question which rotates through a three-month cycle. In January, the question was “What is the most significant change or action you plan to take over the next 12 months to improve your financial well-being?”

While “no changes”’ will likely always be the most popular answer, in January, 15 percent of investors said they plan to invest more. That’s the highest percentage to make that declaration in the last year of questions.

Conversely, there was a high response rate for “save more”. Twelve percent of investors said they plan to put away cash in order to prepare for the future.

Thirty-one percent of all respondents said they would make “no changes’’ over the next 12 months, choosing to ride out the wave in the way they currently are doing.

Investors with $1 million or more in investable assets were more likely to say they will invest more (19 percent) and save more as well (27 percent).

There were also significant differences in responses based on the working status of the investor responding to the survey. Seventeen percent of working investors said they plan to save more while only 5 percent of retired investors said they plan to save more. Retired investors are probably saving as much as they can already since they have no notable changes in income going forward. However, 9 percent of retired investors said they plan to change their spending habits over the next 12 months.

The same question will once again be asked in April and the comparative responses will be interesting based on how the stock market reacts over those three months.



©2020 Spectrem Group



Keywords: portfolio, changes, advisors, investors, Spectrem, savings, index