Spectrem Millionaire Investor Confidence Index (SMICI) = 15

September 2017 – October 2017 Down 4

October 2016-October 2017 Up 6

Spectrem Affluent Investor Confidence Index (SAICI) = 6

September 2017-October 2017 Down 7

October 2016 – October 2017 Up 3

·         Despite the drop, the SMICI remains at one of the highest levels of the year.

·         The SAICI recorded its first drop in four months.

·         Both the SAICI and SMICI are higher than they were one year ago, before the presidential election.

Millionaires and non-Millionaires think differently about their future investment plans.

The stock market continues to climb and corporations across America are reporting positive growth and profits. Although the federal government has yet to change the health care system and the prospect of a new tax code remains up in the air, corporate optimism remains exceedingly high.

Perhaps too high, in the eyes of non-Millionaire investors.

Both the Spectrem Affluent Investor Confidence Index (SAICI) and the Spectrem Millionaire Investor Confidence Index (SMICI) recorded drops in October, as did many of the future investment options considered in the monthly Spectrem analysis of investor plans and expectations. Both the SAICI and the SMICI reached significant highs in September, so a drop in the index in October is not completely unexpected.

The SMICI fell from 19 to 15, but remains at one of the highest levels of the year. The SAICI dropped from 13 to 6 in October, recording its first fall in four months. Both the SMICI and SAICI remain higher than they were one year ago, when election uncertainty ruled the investment landscape.

The monthly SAICI tracks changes in investment sentiment among the 17 million households in America with more than $500,000 of investable assets. The SMICI reflects the investment sentiment of households with more than $1 million in investable assets. The October fielding was conducted from Oct. 16-18, 2017.

One major indicator of investor confidence is the percentage of investors putting additional funds into the stock market. In October, Stock investing overall increased slightly, from 28.4 percent to 30.8 percent, while Stock Market Mutual Fund investing fell from 43.2 percent to 38.4 percent, which again remains high in comparison to the rest of the calendar year. It was the non-Millionaires backing out of the stock market, and Stock Market Mutual Fund investing fell from 42.6 percent to 27.3 percent among that group. The Millionaires actually increased their investment plans in Stocks and Stock Mutual Funds slightly, reaching the highest level in both cases since April of 2017.

However, Millionaires increased their investing in the safety categories as well, including a jump to 30.5 percent in Cash and 20.5 percent in Bond Mutual Fund investing. The Cash investing category reached its highest level since August of 2012.

For non-Millionaires, Cash investing went up as well, to 20.2 percent.

Millionaires and non-Millionaires differed on intention to invest overall, as 46.5 percent of non-Millionaires said they were backing off of investing (an increase of more than 6 percent from September) while only 23.8 percent of Millionaires plan to avoid additional investments in the next month. That’s the lowest level of non-participation among Millionaires since August of 2015.     

The Spectrem Household Outlook, a monthly measure of the long-term confidence in four financial factors that impact a household’s daily life, also recorded a notable difference in the attitudes of Millionaires and non-Millionaires. The Millionaire Outlook rose in October to 37.91, its highest level since April of 2007. The non-Millionaire Outlook dropped for the second month in a row, down to 18.94, its lowest level since June of 2017.

Among the four components creating the overall Outlook, Millionaires recorded a huge jump in their opinion of the Economy, up to 36.42, its highest mark since February of 2011. Among non-Millionaires, Company Health registered its lowest mark since September of 2016. 

 

©2017 Spectrem Group