Wealthy Americans Take Bearish Stance

Affluent investor and millionaires showed sagging optimism in the month of June, according to results of Spectrem’s indexes.

The Spectrem Affluent Investor Index (SAII) fell four points in to June, marking bearish territory for a fourth consecutive month, according to a release from Spectrem Group. The index, which measures the investment outlook of affluent households, was measured 3 points above its record low of -20, which was recorded in March 2008.

Millionaires also showed a decline in confidence. The Spectrem Millionaire Investor Index (SMII) fell three points in June to -12, returning to mildly bearish territory after climbing to neutral the month before. With the decline, the millionaire index stands at its third-lowest level since the birth of both indexes in February 2004. Its record low of -14 came in April 2008.

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“The wealthiest Americans ended the first half of 2008 with a mildly bearish stance, as both millionaires and affluent alike saw their investment optimism sink a bit further in the month of June,’ said George H. Walper, Jr., president of Spectrem Group, in a news release. “Throughout the first half of the year, both groups have hovered around mildly bearish levels, with the affluent generally a bit more pessimistic than millionaires. Despite a small uptick by millionaires in May, it seems clear that both groups are entering the second half of the year in the grips of the same general malaise that defined 2008’s first six months.”

A recent report from Celent said affluent investors compose 92% of wealthy households as well as 47% of total U.S. assets (see What Firms Need to Capture the Mass Affluent).

In response to Spectrem’s open-ended question about the most serious threat to achieving their household financial goals, affluent investors in June cited: the economy (20%); the political climate (12%); market conditions (8%); unemployment (5%); housing and real estate (4%); and health-related issues (3%). The percentage choosing the economy was identical to March 2008 when the question was last asked, Spectrem said.

The company said millionaires expressed slightly less concern (16%) about the economy than the affluent in June and were most concerned with the political climate (19%).

The Spectrem Affluent Investor Index is based on 250 telephone interviews each month with the financial decision-makers in households with $500,000 or more in investable assets. The Spectrem Millionaire Investor Index is based on a subset of the overall survey group that can vary each month, typically drawn from more than 100 monthly interviews.