Affluent Investors Still Confident in Stock Market

Citi Smith Barney’s monthly poll of affluent investors finds continued faith in the stock market, though confidence in the long-term investment climate is slipping.

Seven in ten (69%) respondents to the Working Wealth Investor Poll said now is a good time to invest in the market, according to a news release on the results. One-third of respondents said they expect the market to deliver even higher returns over the next year (35%), with wealthy investors saying they expect their portfolio will return an average increase of 10% over the coming six months.

The top segment of investors (those who have greater than $1 million in investable assets) also remains optimistic about the long-term future of the investment climate, the release said. Three out of four said they expect things to be the same or better 12 months from now.

However, the wealthiest of investors have become notably less positive about the investment climate. Almost half (47%) of those who have at least $1 million in investable assets now say that the investment climate today is better than it was a year ago – a decrease of 15 percentage points from last month’s results and 10 percentage points from the start of the year.

In addition, while 24% of all $1 million investors predicted in January that Democratic control of Congress would prompt the national economy to perform better, only 16% now believe that has happened.

Other Working Wealth poll highlights included:

  • Energy costs, which were the third biggest concern for investors at the start of 2007, have become even more worrisome. The share of wealthy investors who name energy costs as one of the nation’s biggest problems has increased by more than 20 percentage points to be among the top two concerns currently (along with health care).
  • Only one-third of all investors with more than $1 million in this month’s poll say that the federal budget deficit is among the biggest problems facing the country; however, millionaires appear to be much more concerned this month (47%). Additionally, millionaires voice great concern about immigration and military spending.
  • Two out of three survey respondents believe that the smart investor has at least a portion of their money in international investments, and even more agree that “in this day and age, all of the world’s economies are linked together.’

The poll was conducted with 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, by Greenwald & Associates and Synovate. Investors with $1 million or more represent 44% of the interviews. Results are from 560 investors interviewed for the Citi Smith Barney Working Wealth Investor Poll between June 5 and June 20, 2007.