Confidence Among Affluent at Second-Lowest Level

Confidence among affluent investors and millionaires declined last month.

Spectrem Group announced last week that its Spectrem Affluent Investor Index fell five points in November to negative five, matching its second-lowest level ever, while its millionaire investor index fell 11 points to three, matching its second-largest decline since the index debuted in February 2004.

The index, which measures the investment outlook of households with $500,000 or more in investable assets, now stands a point above its all-time low of negative six, which it set in October 2005. The affluent index previously stood at negative five, a neutral reading, in August 2006.

The Spectrem Millionaire Investor Index’s largest decline took place in March, when the index fell 14 points. The November decline returned the index to neutral terrain from mildly bullish.

“Investment optimism among the affluent and millionaires eroded significantly in November, a month that saw the stock market erase much of its 2007 gains,” said George H. Walper, Jr., Spectrem’s president. “With both groups expressing concern about housing and real estate, as well as energy prices, we may not see a significant turnaround in optimism anytime soon.”

In response to an open-ended question about the news story most affecting their economic outlook, affluent investors in November cited housing and real estate (25%), increasing oil and gas prices (20%), the political climate (8%), the Iraq War (7%), the economy (3%) and interest rate increases (1%).

Millionaires expressed greater concern about housing and real estate (31%) in November than the affluent, but equaled affluent concerns about rising oil and gas prices (20%).