Spectrem Group has announced that its Spectrem Affluent Investor Index rebounded strongly in May to a neutral reading of 10, reversing April’s sharp decline that had dropped the index to zero.
The index measures the investment outlook of households with $500,000 or more in investable assets, and May’s advance brought the index within one point of mildly bullish territory. While this index has only achieved that three times since June 2004, the Spectrem Millionaire Index recorded its eighth straight mildly bullish month in May, rising 5 points to a level of 16. The Spectrem Affluent Investor Index is based on 250, 10-minute telephone interviews each month with the financial decision-makers in affluent households.
Spectrem Group reports that affluent investors expressed particular concern in May about higher oil and gas prices, the Iraq War and retirement. Worries about the economy, largely responsible for April’s decline, came in well below these three issues when affluent investors were asked about the top news events driving their economic outlook.
“Affluent investors shook off some of their negative sentiment in May and moved within striking distance of mildly bullish territory, refocusing their concerns on headline issues such as higher oil and gas prices, the Iraq War and retirement. Only the next months’ data will tell us whether April’s sharp decline, which took affluent investor sentiment to the lowest level since February 2004, was an anomaly or signalled a more permanent erosion in investment optimism. However, the continued mild bullishness of millionaires, who tend to take a longer view of investment conditions, may suggest the former,” said George H. Walper, Jr., president of Spectrem Group.
In response to an open-ended question about the news events driving their economic outlook, affluent investors cited increasing oil and gas prices (18%), the Iraq War (13%), retirement (7%), the economy (3%), the deficit (3%), interest rate increases (3%), stock market conditions (3%) and the past presidential election (1%). The percentage choosing higher oil and gas prices tripled from 6% in February, the last time this question was asked.
For millionaires, the top three issues were identical to the broader affluent population with slight differences in percentages. They selected: higher oil and gas prices (20%), the Iraq War (12%) and retirement (7%).