Affluent Investors Rebound to 2007 Economic Confidence Levels

The Spectrem Millionaire Investor Confidence Index (SMICI)™ dropped from 7 to 2 in January, still neutral territory. An increase in the Spectrem Affluent Investor Confidence Index (SAICI)™ to -3 from -8 in December, as well as the highest overall Spectrem Affluent Household Outlook in more than three years, rang in 2011 on a somewhat positive note.
The overall percentage of investors who chose to Not Invest in January dropped to 22% from 25.2% last month. While Non-Millionaires who chose not to invest did increase slightly from 25% to 25.7%, the percentage of Millionaires who chose this option dropped sharply to 16% from 23.6% last month.
Cash and Stock Mutual Funds were again the investments of choice with increases in both categories over the previous month. Millionaire investment in Cash, which increased from 44.3% in December to 58%, correlates with the drop in the SMICI™, indicating a more conservative investing mindset and wariness over the economy.
But Non-Millionaires more than compensated. This wealth level drove the overall Household Outlook, which increased from 11.6% in December to 23.2%, its highest level since July 2007. Their overall Outlook weighed in at 22.5%, way up from 1.8% last month.
Non-Millionaire attitudes were significantly more positive in January, with increases in all components, especially the Economy, which increased to 44% from 11.6%. Their confidence in Household Assets increased to 15.6% from -4.5%, while Company Health increased from -0.9% last month to 13.8%.
Not surprisingly, Stock Market Concerns and the Economic Environment are the factors that most impact investors’ decisions. Of lesser concern are Retirement and Household Income. With the mid-term election long passed and the new Congress in session, the Political Climate is of negligible concern to investors.