Investor Confidence and Politics
Since 2004, Spectrem has taken the pulse of investors monthly regarding investment intentions, specifically in terms of individual stock, mutual fund, bond and/or cash investing.
As one might expect, the Spectrem Affluent Investor Confidence Index (SAICI®) tumbled in April amid all of the stock market movement as institutional investors tried to determine how to proceed in light of the coronavirus impact on the economy.
But when the investors are segmented by gender, wealth status and retirement status, unique perspectives emerge. In April, there was a distinct difference in the confidence of investors based on their political leanings.
Knowing how your clients lean from a political standpoint might seem like an evasive bit of knowledge, but political attitudes do impact investing decisions. Advisors who understand how their clients look at issues based on their political preferences can provide better influence on decisions made with investable assets.
Republicans, who want to support the current presidential administration as much as possible in its efforts to keep the economy strong through the coronavirus attacks, were more likely to maintain interest in investing in equities. In April, 40.7 percent of investors who lean Republicans stated intentions to add to their individual stock investing. That was almost double the 21.1 percent of Democrats or the 23.2 percent of Independents.
Republicans were less likely than the others to extend investing in stock mutual funds or cash products, and it was the Independent voting investors who were willing to extend their allocations in those two areas the most. In stock mutual fund investing, 40.58 percent of Independents stated plans to invest more, and in terms of cash products, 24.64 percent said they would invest more in the coming month. Compare that to the 30.23 percent of Republicans who wanted to invest more in stock mutual funds, and the 15.12 percent that wanted to extend investing in cash products.
Keywords: politics, republican, democrat, independent, Spectrem, investors, advisors, stock market