CHICAGO, January 2, 2018 – As the U.S. Congress prepared to vote on the most sweeping tax reform bill in a generation, investors signaled their approval in December, registering a more bullish sentiment about stock market investing, Spectrem Group reported today in its High Net Worth Insights newsletter. The Spectrem Millionaire Investor Confidence Index (SMICI®) rose seven points to 18, its highest level in three months, while the Spectrem Affluent Investor Confidence Index (SAICI®) increased five points to 12. Both indices are now in mildly bullish territory.
The monthly Spectrem Investor Confidence indices track changes in investment sentiment among the 17 MM households in America with more than $500,000 of investable assets (SAICI), and those with $1 MM or more (SMICI). The survey was fielded between Dec. 14-21, 2017.
43.2 percent of Millionaires indicated intentions to invest in stocks and stock mutual funds in the coming month, an increase of nearly five percentage points from November. Millionaires also indicated growing interest in cash investing, with 22 percent indicating they planned to do so in January. However, a greater percentage of Millionaires expressed an intention to maintain their current level of investments, with 28.8 percent claiming they are not investing more in January.
Among non-Millionaires, interest in stock investing jumped to 26.3 percent, the highest level in that category since May. Interest in cash and bond mutual fund investing also increased in December. 38.1 percent of non-Millionaires plan to stay on the investment sidelines in January, the lowest percentage indicating an intention to do so since February 2017.
One month after confidence in investing among male and female investors was nearly equal, the reporting returned to normal in December, as male investors expressed much greater confidence in investing than females. The Confidence Index among male Millionaires reached 24, its highest mark of the year, while the same marker fell to 5 among female Millionaires.
The Spectrem Household Outlook, which measures long-term confidence in four financial factors impacting a household’s daily economic life, saw an overall improvement in attitudes toward household assets and income, but recorded a notable downturn in the outlook toward the economy overall. Among non-Millionaires, the outlook for the economy fell from a two and a half year high of 26.95 to 7.63, the lowest mark in six months.
“No matter what one thinks about the eventual economic effect of the new federal tax laws, it’s clear that affluent investors anticipate short-term gains in the stock market, and the Spectrem Investor Confidence Indices in December reflect that optimism,” said Spectrem President George H. Walper, Jr. “Investors who are not yet in the Millionaire category displayed a newfound interest in participating in the stock market rise. Investors from all wealth levels expressed some concern, however, about whether these historic stock market levels will translate favorably into the overall economy.”
Charts, including a deeper analysis of the Index and its methodology, are available upon request. Additional insights include:
Index range: -31 to -51, Bearish; -11 to -30, Mildly Bearish; 10 to -10, Neutral; 11 to 30, Mildly Bullish; 31 to 51, Bullish.
About Spectrem Group: Spectrem Group (www.spectrem.com) strategically analyzes its ongoing primary research with investors to assist financial providers and advisors in understanding the Voice of the Investor.