Affluent Investors Have Increased Confidence About Investment Climate

The Citi Smith Barney Working Wealth Investor Poll for May indicates a u-turn in affluent investors’ confidence.
The number of wealthy investors saying they believe the investment climate is better today than it was a year ago fell sharply after the start of the late-February market volatility and remained at around 35%, according to a Citi Smith Barney news release. However, over the last month the most negative assessments improved. Only 22% of respondents said they see things as being worse than a year ago.
The share of investors saying the investment climate will be good over the next six months rose to 58%, from 49% last month, the release said. Additionally, seven in ten respondents said they are optimistic their investment portfolio will meet or exceed their expectations in the near future.
Nearly two-thirds of those polled said now is a good time to invest in stocks or other equity-based investments, an increase of about five percentage points from last month. The optimism was most noticeable among millionaire investors; more than three-quarters of that group said now is a good time to invest in stocks.
Other results of the survey included:
  • Nearly two-thirds of wealthy investors characterize the economy as experiencing either a slow down or a recession; still, only 29% believe things are in an expansion or a recovery.
  • The rising stock market is leading nearly four in ten investors to anticipate that stock market performance will be higher a year from now. This represents a significant increase from 28% of investors last month.
  • Two-thirds believe that the war in Iraq will have a negative impact on the investment climate.
  • The continuing rise in gas prices is also an issue for wealthy investors. More than eight in ten believe that energy prices will be higher in the coming months, the highest score for 2007. Three out of four believe that energy costs will have a negative impact on the overall investment climate in the next six months.
Greenwald & Associates and Synovate conducted the poll of investors who have at least $100,000 in financial assets (excluding real estate and employer retirement plans) – a definition that describes approximately 25% of all U.S. households. Investors with $1 million or more represent 47% of the interviews.