There are many topics related to the American government which are in flux: health care, tax reform, globalization. But one topic that remains steady and aimed in a positive direction is the stock market, and investors have taken note of the fact the arrow continues to point up as far as standard investing mechanisms are concerned.
The Spectrem Market Confidence Index for July showed a second month of gains in the confidence investors have regarding the American economy. Components such as Company Health and, Household Assets, in general all pointed up after suffering severe drops two months ago.
(All of the details on the index can be found at LINK TO STORY HERE)
Besides asking investors about their overall confidence in the economy, stock market and investing in general, the Spectrem monthly index survey also asks an incisive question about the financial attitudes of investors that month. For July, investors were asked what significant change they planned to make over the next 12 months to improve their financial well-being.
And guess what response got the most votes?
Twenty-nine percent of investors said they planned no changes to their investment strategies for the next year. That’s an indication that the current state of affairs is working for them and they see no need to alter their investment, either by investing more or investing less. “Let it ride’’ and “stay the course’’ were two popular responses to the question.
Twenty-two percent of investors said they plan to alter their investment strategies and many of those alterations were apparently aimed at savings in general or adding to retirement accounts. “Increase contributions to retirement funds” was a popular answer, either by working investors who want to increase their contributions to their 401(k) accounts or retired investors looking to add to other savings vehicles.
There was also some responses that indicated investors plan to alter their strategies by moving investment funds into safer vehicles. Several investors said they wanted to move away from the stock market and into steadier investment income streams.
Either way, these are moves advisors can assist with, and provide guidance as to the best way to make such alterations in portfolios. Advisors would be wise to inquire with their clients whether the current financial and economic atmosphere is causing them to want to make changes in their investment strategies.
A couple of responses to the question about the next 12 months which did not get a great deal of support were “invest in new products” and “pay down debt”. Only 9 percent were looking to new investment products and only 8 percent are planning to pay down debt as part of their year-long investment strategy.
The Spectrem Household Outlook, which compiles investor rankings of Household Assets, Household Income, The Economy and Company Health, took notable jumps after recording low numbers the last two months. Household Income recorded the greatest increase, which is good news for both investors and advisors as an indication that investors are recording positive results from both their work environment and their investment portfolio.
The Spectrem Affluent and Millionaire Investor Confidence Index is designed to give an up-to-the-minute glance at the mood of investors, and the July reading indicates that investors are seeing positive results and gaining in optimism. This is a condition that advisors should note and discuss with investors to determine if the optimism should be monetized with an increase in investments.