Affluent household confidence levels dropped slightly in October indicating that investors are still nervous about the future. The Spectrem Affluent Investor Confidence Index (SAICI) dropped from -13 to -15. (Affluent investors are defined as those with $500,000 of investable assets). This rating is still in bearish territory based upon the overall Index scoring. Millionaires were similarly doubtful with the Spectrem Millionaire Investor Confidence Index (SMICI) dropping from -5 to -7. While Millionaire households are traditionally more positive than the Affluent, this rating is still in Neutral territory. The Indices have not been in bullish territory since May 2007. Millionaires were Mildly Bullish in October of 2007.

While many claim the recession may be over, the affluent and millionaire households that participate in this research are not full of optimism. The results of the SAICI and SMICI are comparable to the results of the Consumer Confidence Survey released by the Conference Board on October 27th. Clearly there are many factors contributing to the jitters being felt by investors regardless of wealth sector.
 
Investors identify Stock Market Conditions as the primary factor contributing to their concern as well as concern over the overall Economic Environment. This is despite the fact that for a short time the Dow exceeded l0,000… the number many of these individuals had identified previously as the benchmark to signify that the recession was over. Another factor that is not as significant as the first two but continues to grow is concern over the Political Climate. As Congress continues to debate Health Care reform investors tend to worry about the overall deficit as well as the impact any legislation may have on their own household. 

Generally Millionaire households are more optimistic and more likely to invest in the markets than the Affluent. This month there is a little bit of optimism as the Millionaires have once again started to return to the markets. Although Cash continues to be the investment of choice, Millionaires are more likely to be investing in Stocks and Mutual Funds than in the past. Even more interesting is an increase in the Millionaires’ interest in Real Estate.

As of the end of October the GDP results were positive and the market continues to hover just under 10,000. It will be interesting to see if these small bright spots will gradually ease the frustrations and fears of the affluent investors.

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