New Year Brings Cautious Optimism for Wealthy Investors

A Spectrem Group survey of investors with $500,000 and more in investable assets reveals a guarded optimism in the economy and their own financial positions.

The news in December that the nation’s unemployment rate had dropped to 9.4%, the lowest since May 2009, was tempered by the lower than expected new job creation.      But 30% of respondents expect the unemployment rate to improve over the next 12 months.  A more detailed study of investors with a net worth of $100,000 to $1 million not including their primary residence revealed that more than three-quarters believe that a drop in the unemployment rate is an indicator that the recession is over, and more than half will consider the recession over when the unemployment rate falls below 6%.

This is a more optimistic outlook than last August, when roughly 60% of investors surveyed expressed a dour view of the economy as well as what they perceived to be the President and Congress’s inability to work together.  In the current survey, 18% percent believe that the new Republican-dominated Congress will act to reduce the deficit, while 17% have hopes that President Obama and the Congress will more effectively work together during 2011.  On the home front, more than a third believe their financial situation will improve in 2011. Forty-one percent said they will increase their savings, while 20% plan to make a large purchase, such as a new car, house, or lavish vacation.  Fourteen percent said they would be less conservative investors.

With the new Congress in place and bringing a shift in the political climate, America’s wealthy investors appear hopeful that the country’s lingering economic concerns will ease as the year unfolds.