Spectrem’s ongoing monthly polling has uncovered a striking change. The affluent are much more concerned about the Iraq War than they have been in over two years.

When asked which story in the news most affects their economic outlook, they mentioned the Iraq War, which doubled in concern since the previous measure.

With America’s time spent in combat operations in Iraq now exceeding our participation in World War II, and an increasingly bleak picture of failure and corruption portrayed in the media, American’s have grown weary. Each day, Americans are inundated with news of more young soldiers and Iraqi civilians dying, with no end in sight.

One might infer that such concern about Iraq and its affect on the affluent economic outlook, might result in a pulling away from the markets; but as the Dow sets new record highs each day for almost a month, and the S&P nears its all time high, we can see that is not the case.

The affluent may feel that the Iraq War may have an impact on the economy, but so far this has not notably altered or driven the way they invest. This may be because people tend to show greater concern for stories to which the media gives more extensive coverage. But unless the economy more obviously also trends in a positive or negative fashion, it may not alter investment tactics.

Examining the change in America’s GDP since 2003 (the start of the Iraq War), percent change from year to year hasn’t shown the strongly negative response some economists predicted at the start of the conflict. It has, in fact, risen and stabilized at what the Federal Reserve currently feels is a sustainable level.

Though America may be at war in Iraq and Afghanistan, thus far military conflict has not appeared to disturb the investing patterns of affluent Americans. Its economic influence in the long-term leaves to be seen.

Discuss this article on the forums. (0 posts)

---