The Spectrem Affluent Investor Index declined 9 points in April to zero, the lowest level since its inception in February 2004.
The April decline, which kept the index in neutral territory for a second consecutive month, came as affluent investors expressed concern that stock market conditions, the economic environment and retirement are threatening their investment plans. Underscoring their level of concern about the economy, the Household Economic Outlook component of the affluent index also fell to a new low in April.
The Spectrem Affluent Investor Index, which measures the investment outlook of households with $500,000 or more in investable assets, has been on neutral footing for eight of the past 10 months, rising into mildly bullish territory only in February 2005 and December 2004. The Spectrem Millionaire Index also fell sharply in April, losing 10 points to a mildly bullish level of 11.
“The investment outlook of affluent investors declined once again in April, this time falling to the lowest level since we began tracking it on a monthly basis in February 2004. This came as recent headline items such as higher gas prices and Social Security reform translated into broader concerns about stock market performance, the economy and retirement. Until the economy picks up steam or some other event gives them a shot in the arm, it does not appear likely that affluent investors will stray far from their current neutral outlook,” said George H. Walper, Jr., President of Spectrem Group.
In response to an open-ended question about the factors most impacting their investment plans, affluent investors cited: stock market conditions (17%), the economic environment (13%), retirement (11%), household cash flow (9%), household income (7%), low investment/interest returns (5%), jobs/job security (3%), and interest rate increases (2%) as their key concerns. When this same question was last asked in January, stock market conditions were the top response at 18% followed by household cash flow (11%) and the economy (10%).
Millionaires mirrored the concerns of the broader affluent population in April citing stock market conditions (20%), the economy (16%) and retirement (10%) as the biggest threats to their investment plans.