Mired Economy Frustrates Growth in Affluent and Millionaire Indexes

The Spectrem Affluent Investor Confidence Index (SAICI) was unchanged this month at an almost mildly bearish -9 points, while the Spectrem Millionaire Investor Confidence Index (SMICI) dropped from -1 to -5. Millionaires’ investment choices this month reflected this decline. More chose to Not Invest as they decreased their investment in Stocks and increased holdings in Cash.

Non-Millionaires were much more active on the investment front, with fewer choosing to Not Invest. At the same time their investment in Cash reached its highest level since March. And while more Millionaires than Non-Millionaires invested in Stocks and Bond Mutual Funds, Non-Millionaires did increase their activity in these investment options. They were also invested more than Millionaires in Bonds and Real Estate.

The stubbornly slow-to-recover economy no doubt held back the Spectrem Affluent Household Outlook, which did rebound from last month, but to a level that is at its lowest since September of last year. Overall, confidence toward Household Assets, Household Income, the Economy and Company Health increased. But between the wealth groups, Non-Millionaires expressed more confidence in the Economy than Millionaires. And while Non-Millionaire households have negative readings in three of the four Outlook categories, the positive sign is that they at least expressed increased confidence in their Overall outlook as well as three of the four categories.

Stock Market Conditions and the Economic Environment are the primary factors investors are saying most affect their investment plans. Their concerns have no doubt been exacerbated by the looming imposed Aug. 2 deadline for President Obama and Congress to reach an agreement on raising the debt ceiling. This increasingly contentious and partisan debate would seem to be casting a long shadow. Investors say their investment plans are also being affected by the Political Climate, Retirement, and Household Income, as politicians and pundits wrestle with the impact of an unprecedented default on stocks and bonds, retirement plans, Social Security, and employment.