The volatility that has plagued the markets and the economy sparked by the suprime mess has played havoc with the psyche of both advisors and their clients. Several recent measures of advisor and client sentiments portray a significant lack of confidence in both the current state and the near-term outlook for the markets and the economy.
The Rydex AdvisorBenchmarking Advisor Confidence Index (ACI) fell 8% month-over-month to a four-low in March, with advisors voicing particular pessimism on the current economic outlook, the six- and 12-month economic outlooks, and the stock market outlook. The ACI has been falling since July 2007, Rydex AB reported in releasing the results of its latest survey on March 31.
The Spectrem Affluent Investor Index fell to an all-time low in March, as did the Spectrem Millionaire Investor Index, the research group announced April 2. Spectrem President George H. Walper Jr. noted that millionaires tend to be more bullish than the merely affluent (those with more than $500,000 in investable assets), but that the most recent findings were "an unprecedented situation" where both groups are bearish at the same time. When asked to list the most serious threat to their household financial goals, the affluent group cited the economy (20%), the political climate (14%), market conditions (11%), and housing and real estate (7%).