America's millionaires showed renewed confidence in the economy last month, according to an index released Wednesday by Spectrem Group, a Chicago consulting firm that specializes in the affluent and retirement markets.
Spectrem Millionaire Index showed that wealthy Americans were "mildly bullish" at the end of October, the company said. The October rebound was to an index reading of 14, from seven in September when the index fell to "neutral" for the first time this year.
Millionaires were more optimistic than the overall affluent population. This has been the trend for most of 2004, the company said. The broader Spectrem Affluent Investor Index, which measures the investment outlook of households with $500,000 or more of investable assets, remained at a neutral level of four in October. The index has been in neutral territory since July.
George H. Walper Jr., Spectrem president, said the upswing in confidence among millionaires is good news for all investors since this group tends to set trends for the affluent population. The result suggests "we may be seeing a bottom to the greater pessimism investors have exhibited since midsummer," he said.
In response to an open-ended question about the factors most affecting their investment plans, affluent people cited: stock market conditions (16%), the economic environment (12%); household cash flow (10%); the election (7%); interest rate increases (6%); household income (5%); and low investment returns, retirement, and job security (all at 4%). When the same question was last asked, in June, stock market conditions were mentioned as a factor by just 7% of respondents.