Affluent Investor Confidence Inches Higher

The New Year began with investment wariness continuing.  Our monthly survey of investment preferences shows Not Investing rising by 2.6 points.  There was movement away from Cash slightly and towards stocks, especially by Non-Millionaires.  Investment in Stocks, in these households, rose to a near year-high.  The number of Non-Millionaires who chose to Not Invest was the lowest since June 2011.

The Spectrem Affluent Investor Confidence Index (SAICI) posted a 1 point gain, moving to a neutral -8.  This marks the highest reading since May 2011 and the fifth consecutive month this index has registered an increase.  The Spectrem Millionaire Investor Confidence Index (SMICI) also gained 1 point, moving to a neutral -2, the highest level seen in seven months.

The Affluent Household Outlook, which measures investor attitudes regarding financial components that impact daily lives, moved in a positive direction for the first time in six months.  This was mainly driven by a show of confidence in the Economy.  While readings were in negative territory, this component showed significant gains over the pervious month in Millionaire and Non-Millionaire households.  Household Assets also showed an increase.

The past year, 2011, was dubbed “the Year of Volatility” (aka “the Year of Uncertainty”) by pundits, so it is not surprising that investors said Stock Market Conditions were one of the largest factors affecting their investment plans. The Political Climate is not as large of a factor currently, but as the presidential campaigns heat up, tensions are bound to increase.  This was witnessed in the renewed debate over President Obama’s request to raise the debt ceiling an additional $1.2 trillion, which is expected to cover borrowing until after the election.