July 27, 2011

Millionaires Losing Confidence in Economy: Spectrem Index

Political debate over U.S. debt ceiling faulted for exacerbating millionaires’ concerns

The Millionaire Investor Confidence Index dropped four points in July to its lowest level in nearly a year, the consulting firm Spectrem Group announced Wednesday.

The July reading of minus 5 was off from the June reading, which saw a two-point drop from May. The decline brings the millionaire index to its lowest level since September 2010, when it stood at minus 6.

George H. Walper Jr. (left), president of Chicago-based Spectrem Group, faulted the ongoing debt-ceiling debate in Washington for contributing to millionaires’ uncertainty about the economy and their finances.

“U.S. millionaires saw their confidence fall again in July, dropping to the lowest level in nearly a year, while the broader affluent population was unchanged following a sizable June decline,” Walper said in a statement. “The political debate this month over efforts to raise the nation’s debt ceiling no doubt exacerbated the concerns of millionaires and affluent investors alike, as both groups focused much of their attention on stock market conditions and the economy.”

Meanwhile, the Spectrem Affluent Investor Confidence Index, which measures the investment confidence and outlook of households with $500,000 or more in investable assets, was unchanged in July at minus 9.

Both the millionaire and affluent indexes stood at what Spectrem Group terms a “neutral” reading. The data have a margin of error of plus or minus 6.2 percentage points. 

The Spectrem Affluent Investor Confidence Index is based on 250 monthly email interviews with the financial decision-makers in households with $500,000 or more in investable assets.  The Spectrem Millionaire Investor Confidence Index is based on a subset of the overall group.

In response to an open-ended question about the one factor most affecting their investment plans, affluent investors in July cited stock market conditions (24%); the economic environment (21%); the political climate (13%); retirement (12%); and household income (8%). 

Millionaires were slightly more focused on stock market conditions (25%) than the affluent but less focused on the economic environment (19%).

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