It turns out the merely comfortable are expecting better performance from the economy and their individual investments through the remainder of the year than those residing in highest tax brackets.
Spectrem Group, a Chicago-based strategic consulting firm specializing in the affluent and retirement markets, today released its Affluent Investor Confidence and Millionaire Investor Confidence indices for May and found that households with more than $500,000 in investable assets were slightly more optimistic about the economy and their portfolios than those with $1 million or more in assets.
Spectrem officials said this month's data marks the first time in more than three years that millionaires' overall confidence in the market was lower than the mass affluent group, a sign that the market's recent strong performance is making believers of any even larger pool of investors.
"The investment confidence of affluent investors improved in May, more than recouping its April decline during a month when politics and energy prices were top concerns for the nation’s wealthiest investors," Spectrem President George Walper, Jr. said in the report.
"Interestingly, this advance brought the affluent to a higher level of investment confidence than the millionaire population, which is unusual since millionaires have historically been the more confident group," he added.
The survey of 250 financial decision-makers in households with $500,000 or more in investable assets yielded a 9 point increase in Spectrem's Affluent Confidence Index in May to a composite score of 2 -- up from a -7 score recorded in April.
Meanwhile, the firm's Millionaire Investor Confidence Index inched up 2 points to a score of 1, a modest increase that pales in comparison to the scores of 8 and 17 posted in March and February, respectively.
This recent cooling of expectations among the nation's wealthiest investors has largely been pinned to rising oil and gasoline prices, political upheaval in the Middle East, inflation fears and the uncertainty surrounding new regulations and reform of the health care and financial services industries.
When asked what factors were influencing their overall economic outlook in May, 23% of millionaires cited the political environment while 13% were concerned about gas and oil prices.
Among the mass affluent respondents, the political climate still was the most relevant issue (17%), followed by gas and oil prices (14%), the economy (10%) and the national deficit (10%).
Register or login for access to this item and much more
All Financial Planning content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access