CHICAGO, June 1, 2017 – While U.S. markets continued their bullish run in May, confidence among wealthy investors plummeted, Spectrem Group reported today in its High Net Worth Insights newsletter. The Spectrem Millionaire Investor Confidence Index (SMICI®) fell 17 points from April to 3, the largest month-over-month decrease in the 13-year history of the Index, while the Spectrem Affluent Investor Confidence Index (SAICI®) declined four points to 6. It is the first time the SAICI has eclipsed the SMICI since May 2011.
The monthly Spectrem Investor Confidence indices track changes in investment sentiment among the 17MM households in America with more than $500,000 of investable assets (SAICI), and those with $1MM or more (SMICI). This month’s survey was fielded between May 19-23, 2017.
The record-breaking drop in the SMICI was caused by the almost four in ten (39 percent) Millionaires who indicated they plan to avoid investing in the coming month, 15 percent more than in April. It is the highest percentage of Millionaires declaring their intention to stay on the investing sidelines since December 2013.
Declining investor sentiment among Millionaires may be a result of a turbulent month in Washington, D.C. that has generated significant doubt about prospects for the Trump Administration to deliver on promised substantive tax reform. More than half of investors surveyed (54 percent) cited the political environment as the story in the news most affecting their economic outlook, dramatically greater than any other topic.
“Even though the stock market remains at near-record high levels, Millionaire investors are becoming increasingly cautious,” said Spectrem President George H. Walper, Jr. “This is likely due to growing concerns about the weakening political position of President Trump given recent controversies, the declining likelihood of substantive tax reform in the near-term, as well as concerns about the recently submitted proposed federal budget. Although non-Millionaires also recorded a drop in confidence, the fact they are slightly more confident now than Millionaires is a strong indication that we may be entering a tumultuous period for investors.”
Charts, including a deeper analysis of the Index and its methodology, are available upon request. Additional insights include:
Spectrem Affluent Investor Confidence Index®
Spectrem Millionaire Investor Confidence Index®
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.