In what may be a long-term problem, political events in the United States continue to have an effect on the confidence of American investors. But, because the new presidential administration is now in its sixth month, investor attitudes appear to be normalizing a bit.

After suffering its biggest drop in its 13-year history, the Spectrem Millionaire Investor Confidence Index (SMICI) rebounded slightly, back up to 6 in June. That is still the lowest mark for the SMICI since September of 2016.

One month ago, the Millionaire index was actually lower than the Spectrem Affluent Investor Confidence Index (SAICI), and that had not happened in more than five years. Those numbers have once again reversed, and the SAICI is at 2, a drop of 3 since May and the lowest mark since May of 2016.

Asked “What is the most serious threat to achieving your household financial goals at this time?” 25 percent of investors said it was the Political Climate.

The monthly Spectrem Affluent Investor Confidence index tracks changes in investment sentiment among the 17 million households in America with more than $500,000 of investable assets. The Spectrem Millionaire Investors Confidence Index (SMICI) reflects the investment sentiment of households with more than $1 million in investable assets. The June fielding was conducted from June 16-June 20.

The Millionaire index might have been expected to rebound from its tumultuous drop in May. However, the slight increase in the SMICI was one of the few positive numbers to come from the June survey.

Forty-two percent of investors said they intended to stay out of the investing game for the coming month, and that is the highest percentage of non-participants since December of 2013. In February, 33.6 percent of investors said they planned not to invest, and the percentage has climbed in the four months since. The current increase in investors not investing is driven by the affluent investors, while among Millionaires, there was a slight decrease in those not investing, from 39.4 percent to 38.3 percent. 

Among Millionaires, there was a stated intent to increase investments in stock, stock mutual funds and bond mutual funds as well as cash. Among Affluent investors, there were increases in intent to invest in cash, bond mutual fund and real estate.

Market Conditions (17 percent) and The Economy (16 percent) were the other factors most frequently cited as a serious threat to achieving household financial goals. Those factors saw slight increases since the last time the question was asked in March of 2017. 

The Spectrem Millionaires Household Outlook, a monthly measure of the long-term confidence in four financial factors that impact a household’s daily life, dropped for the second straight month to 19.50, the lowest mark since October of 2016. There was a severe drop in the outlook for the Economy, from 12 to .4, the most significant drop again since October of 2016.

There were also smaller decreases in the outlook for Household Income and Household Assets, although there was a slight rise in the outlook for Company Health. Millionaires reported an improvement in outlook for Household Assets, but joined the Affluent investors in their negative outlook toward the Economy.

 

©2017 Spectrem Group