Spectrem Affluent Investor Index (SAII)  Drops 8 points.

The Spectrem Affluent Investor Index gave up 6 points from July to August, dropping  to -1 on the index, in neutral territory.

Spectrem Millionaire Investor Index (SMII) Drops 8 points.
The Spectrem Millionaire Investor Index dropped 8 points from July to August, stopping at 7 on the index, in neutral territory.

Weakening housing  market and dire credit market reports, teamed up with a roller coaster stock market to deliver a one-two punch to affluent investor sentiment. With the economy predicted to slow through the end of the year, and despite hints by the Federal Reserve that it will “act as needed” to keep the credit crisis from damaging the national economy, the affluent are feeling pessimistic, expecting a diminishing of their housing assets and overall wealth.

The Spectrem Millionaire Investor Index (SMII)®, which measures the investment outlook of households with $1,000,000 or more in investable assets, dropped 8 points from July to August,  stopping at 7 on the index, in neutral territory, while the Spectrem Affluent Investor Index (SAII)®, which measures the investment outlook of households with $500,000 or more in investable    assets,  dropped 8 points in August to -1, dipping below zero for the first time since August 2006.

“With the housing crisis and its immediate fallout on many investors’ minds, optimism among the affluent and millionaires retreated significantly in August and now hovers near the lows reached after the February 2007 market plunge. As long as the housing crisis    continues to make headlines, investment confidence for the nation’s wealthiest investors may well face a strong headwind,” said George H. Walper, Jr., President of Spectrem Group.

Spectrem’s Investment Preferences, which reflects affluent investor intentions in the near term, showed affluent investors continuing to stay away from the markets with Not Investing continuing to rise (5.4). Though there is a slight rise in interest in Cash and cash equivalents and Bond Mutual Funds, predictably, Real Estate was sharply down (-3.6) to its all-time index low, and Stocks continued their drop to their all-time index low.

In Spectrem’s Perception of Issues, millionaires and the affluent show their deep concern over housing and real estate, which 43% say is the biggest concern affecting their economic outlook, a dramatic rise from 9% in May.

Spectrem’s Affluent Household Outlook responded to continuing stock market instability and concerns about mortgage defaults and a depressed real estate market by falling -9.7 points, the largest drop since August 2005. Non-millionaires are more concerned about household income ( down -17.5) than millionaires (down -6.5). However, millionaires expressed high anxiety over their household assets, which they may feel are endangered by the current economic climate, with a hefty -22.2 drop.

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