The promise of new federal tax laws spurred the stock market to even higher levels in December and investors took note, expressing optimism for market investments in the new year.
According to the December Spectrem Millionaire Confidence Index (SMICI®), more Millionaire investors plan to invest in stocks and stock mutual funds, while the Spectrem Affluent Investors Confidence Index (SAICI®) shows a similar increase in interest among all investors with at least $500,000 of investable assets.
It is rare when both those with less than $1 million in investable assets act in a similar fashion as those with more than $1 million in investable assets. This is an indication that the appeal of the current market trends is reaching all investors.
Among all investors, there was also an increase in interest in Cash and Bond Mutual Fund investing. The only significant decrease reported was in Real Estate investing, which was down to 5.2 percent of all investors.
Millionaires vs. Non-Millionaires
Both Millionaires and non-Millionaires recorded an increase in Stock and Stock Mutual Fund investing, with the highest percentage increase among non-Millionaires in Stock investing to 26.3 percent. That is the highest percentage of non-Millionaires investing in Stocks since May.
There was a large drop among Millionaires in Real Estate investing, but that is not a surprise as the November percentage of 12.6 percent was the highest mark since July of 2014.
Notably, there was a difference in how Millionaires and non-Millionaires responded to whether they were going to increase investments overall in January. Non-Millionaires dropped to 38.1 percent not investing more in January (the lowest percentage since February of 2017), while Millionaires actually increased the percentage not investing more in January to 28.8 percent.
Men vs. Women
The increase in Stock and Stock Mutual Fund investing was driven entirely by male investors, with an 11 percent jump in Stock investing and a 5 percent increase in Stock Mutual Fund investing from November to December. Female investors, who were strongly engaged in November, reported a drop in interest in both categories in December.
The only category in which female investors reported an increase was in Cash investing, climbing to 23.3 percent, one of the highest percentages of the year.
The overall index between men and women was 21 among men to -3 among women, the largest dichotomy of the year among all investors. Among Millionaires, the difference between men and women was 24-5, after the report in November in which the difference between male and female Millionaires was as close to zero as it has ever been.
Republican vs. Democrat vs. Independent
The rise in interest in Stock and Stock Mutual Fund investing was fueled almost entirely by an increase in interest investors who consider themselves to be Independent voters politically. Independents reported 36 percent interested in Stock investing and 44 percent interested in Stock Mutual Fund investing, both highs for the year.
At the same time, Republicans and Democrats reported a decrease in Stock and Stock Mutual Funds, and investors representing both parties expressed a greater likelihood to avoid an increase in investing in January.
Working vs. Retired
Both working and retired investors joined the binge on Stock and Stock Mutual Fund investing, and by similar percentages. Working investors reported an increased interest in investing in all categories other than Real Estate investing after an unusual rise in that category in November.
Almost 50 percent of retired investors reported an intention to avoid increased investments in January.
© 2018 Spectrem Group