Investors Ignore Political, Economic And Climate Concerns In Favor Of Investing

The monthly Spectrem Millionaire Investor Confidence Index (SMICI^®), which tracks changes in investment sentiment among households with $1 MM or more in investable assets, climbed out of negative territory and rose 6 points from -2 to 4 in September. The Spectrem Affluent Investor Confidence Index (SAICI^®), which measures investment sentiment among the 17 MM households in America with more than $500,000 in investable assets, rose from -7 to -2 in September but remained in negative range for the third consecutive month.

The September survey was fielded Sept. 17-23, 2019, during a period when the S&P 500 Index tested record highs, impeachment of President Donald Trump became a greater possibility, China and the U.S. failed to make progress on trade negotiations, and the likelihood grew that Britain would crash out of the E.U. without a negotiated deal on Brexit.

Despite these uncertainties, investors chose to focus on the numbers, and the numbers were all good. During the month, the S&P 500 continually brushed up against record highs reached in late July. Similar trends were seen in the Dow Jones Industrial Average and the NASDAQ. When asked about their investment intentions, investors indicated continued faith in the current market momentum.

Interest among all investors in individual stocks rose slightly in September, as did interest in stock mutual fund investing. Among non-Millionaires, investing in individual stocks rose from 17.7 percent to 20.7 percent, and investing in stock mutual funds climbed from 23.9 percent to 27.3 percent.

Investing in safer products like cash and bonds dropped among all investors in September, and cash investing dropped considerably, from 28.80 percent to 22.0 percent among all investors. That decrease was consistent between both Millionaires and non-Millionaires, who don’t always agree on investing intentions, according to the Spectrem Confidence Indices.

However, the Spectrem Confidence Indices also asked investors whether they intend to increase their allocations in the coming month, and among Millionaires and non-Millionaires, those not investing rose. Among Millionaires, the percentage rose to 34.9 percent, the highest percentage of the year.

Spectrem’s Household Outlook, which measures investor sentiment based on four key household financial components, also improved following a steep decline in August. After losing almost 17 points in August, the Outlook rose in September from 8.0 to 14.50, which is still one of the lowest Outlook ratings in the calendar year 2019.

The outlook for the economy remained in negative territory among all investors, although it improved from -25.20 to -12.40. Investors who identify as Republicans were the only segment of investors with a positive outlook on the economy, rating their outlook at 20.62. Overall, the outlook for the economy has been in negative territory in four of the nine months of 2019.

“Despite concerns about the outlook for the U.S. economy, investors clearly believe that, for the time being, favorable market fundamentals remain a reason to continue to put their capital to work and not to sit on the sidelines over concerns about rising political tensions and other uncertainties,” said Spectrem President George H. Walper Jr.

Charts, including a deeper analysis of the index and its methodology, are available upon request. Additional insights include:

• Investors Believe the Stock Market
• High Income Millennial DC Participants

About Spectrem Group: Spectrem Group (www.spectrem.com) strategically analyzes its ongoing primary research with investors to assist financial providers and advisors in understanding the Voice of the Investor.