Volatility Drives Affluent Investors from Equities


Market volatility as well as a stormy political climate are driving affluent investors back to the sidelines, according to a new Spectrem Group investment preferences survey.

Intention to invest in a variety of aggressive and conservative vehicles was down in March. The only category that showed an increase was “Not invest,” which gained four points from the previous month to 33.20, a four-month high.

Most affluent investors intend to invest in Stock Mutual Funds, but this category was down 2.30 points to 40. Intention to invest in Stocks declined 3.20 points to 30.40. Affluent investors also indicated they would be less likely in the coming month to invest in Cash, which declined four points to 18.80, another four-point low.

In a separate Spectrem Group survey of affluent investors, the highest percentage said they consider market conditions to be the most serious threat to achieving their financial goals at this time. In March, the Dow Jones industrial average did reach the 18,000 benchmark, but it also suffered triple digit drops fueled by investor speculation over when the Federal Reserve would raise interest rates as well as less than encouraging economic reports, such as a 17 percent in housing starts and rise in consumer prices.

Spectrem Group breaks down affluent investment preferences by Millionaire and non-Millionaire households. As is characteristic, non-Millionaires are expressing a more cautious investment mindset. A higher number expressed that they would be holding on the sidelines in the coming month (38.5 points vs 28.1 points for Millionaires).

In comparison with their Millionaire counterparts, there was, too, a greater decrease in the number of Non-Millionaires who said that they would be investing in Stock Mutual Funds, Stocks and even Cash.


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