Optimism Cools as the Affluent Follow the Market into Waiting Pattern
Spectrem Indices (June 2006 to June 2007)
The Spectrem indices fell in June giving up territory gained in May, with the Spectrem Millionaire Investor Index (SMII)™ dropping 5 points to a mildly bullish 15, and the Spectrem Affluent Investor Index (SAII)™ down 4 points to 7 and neutral territory.
Affluent investors know that timing is vital, and they have decided that now is a good time to wait. As June's Dow, S&P and NASDAQ jumped up and down, giving investors vertigo; and market traders wait to see if there will be interest rate movement from the Federal Reserve’s quarter ending statement, the affluent expressed their intention to invest in cash and cash equivalents in the near term.
Cash is the only investment vehicle that saw a significant rise this month (33 to 40), among the affluent. Bonds rose slightly, but all else remained relatively steady, including stocks and stock mutual fund investing.
An investment intention that supports the current affluent holding pattern is that Not Investing remains level.
The economy is a major source of concern for the affluent, who point to it when asked to name the "Most Serious Threat to Achieving Your Household’s Financial Goals at This Time."
What is striking is that gas and oil prices are not seen as a larger threat to achieving goals, particularly since prices now stand at record highs. Though some pundits claim today's prices aren't as high as the 1980’s when adjusted for inflation. And behaviorally, the fuel consumption habits of the American people haven’t seen much change.
Spectrem's Affluent Household Outlook held fairly steady in June with a slight drop (-0.2%), amidst ongoing concerns about the economy and stalled markets as traders wait for Federal Reserve announcements and watch economic indicators for a clue into Q3'07.
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