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Reality Check for Millionaires |
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The Spectrem Millionaire Investor Index (SMII®) plummeted a record 18 pts., canceling out last month’s record 17 pt. rise, from –2 to –20. The Spectrem Affluent Investor Index (SAII®) also fell, though less dramatically, from –12 to –20.
The closest the SMII® has come to this level of drop was back in November of 2008, when it fell 15 pts. Why are the Millionaires reacting so dramatically this month? For one thing, they are more leery of investing in stocks than they were last month, as well as the fact that they are much more concerned about the economy than are the Affluent. The Outlook for Assets, Household Income and Company Health all dropped for Millionaires. Clearly the sentiments of Millionaires are extremely volatile. Last month’s dramatic rise was a case of an over-abundance of optimism and this month there is a reality check.
The Economy and Political Climate are tied as the two issues that are a serious threat to the affluent achieving their financial goals. These issues have over the last year, been a thorn in the side of the affluent, and considering the current climate, both economically and politically, that is unlikely to change in the near future. Millionaires were more concerned with current political climate than are the Affluent, perhaps fearing tax implications or other changes that might happen under the Democratic Obama administration.
Inflation rose as a concern, from 2% in March of 2009 to 8% this month, showing that the Affluent and Millionaires are sitting up and taking notice of what might happen if inflation worsens.
Not Investing ticked up slightly, as Stocks, Bonds, Stock Mutual Funds all fell. Real Estate also fell this month, as Cash rose.
The Outlook climbed to its new high since August of 2008 as it reached 7.1 this month. The Outlook was buoyed by big jumps in Household Income and Assets and Economy. There was a dip (down 5.2) in the Company Health measure, which is perhaps an adjustment from last month’s 11.6 pt jump.
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High Net Worth Advisor Insights Newsletter April 2008
