CHICAGO, February 1, 2019 – Despite the longest federal government shutdown in U.S. history, wealthy investors chose to hold their cards close to the vest in January, Spectrem Group reported today in its High Net Worth Insights newsletter. After registering significant decreases in November and December, the Spectrem Millionaire Investor Confidence Index (SMICI®) and Spectrem Affluent Investor Confidence Index (SAICI®) indices each recorded minor gains in January, although the overall confidence index numbers remain very low.
The SMICI increased one point to 2 in January, while the SAICI increased two points to -3. However, the SAICI remained in negative territory for the third consecutive month, marking the first time that has occurred since Dec. 2012-February 2013.
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). January’s survey was fielded January 18-24, 2019, as the Dow Jones Industrial Average recorded its third consecutive week of modest gains despite prolonged government gridlock.
Among individual investing categories, millionaire investors reported a slight increase in both stock and stock mutual fund investing in January, while non-millionaires increased investments in stock mutual funds. Both millionaires and non-millionaires reported increases in cash investing, an indication of interest in safer investment products. The number of investors planning not to invest in the coming month decreased among both groups.
While there was a slight improvement in confidence overall among millionaires and non-millionaires, the Spectrem Household Outlook, which measures investor sentiment based on four key household financial components, declined to 10.90 among non-millionaires in January, its lowest mark since October 2016. Among millionaires, the Outlook fell to 10.47, also the lowest mark since October 2016. While millionaire Outlook is historically higher than non-millionaire Outlook, the non-millionaire number has been higher in two of the last four months as a result of high market volatility and the uncertainty it engenders among wealthy investors.
“Investors don’t like to miss market opportunities and seek to remain active, but the recent government shutdown was extraordinarily confusing for those making investment decisions,” said Spectrem President George H. Walper, Jr. “Additionally, recent corporate earnings have been mixed, and uncertainty prevails about the outcome of ongoing trade negotiations between the U.S. and China. While not all news has been negative for investors, prolonged uncertainty has left most wealthy investors unsure of how to proceed.”
Charts, including a deeper analysis of the index and its methodology, are available upon request. Additional insights include:
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