Three separate investor surveys show strong boosts of confidence, though many high-net-worth investors remain hesitant about jumping into the markets.
“Non-millionaires were particularly active investors in March,” said George Walper (right), president of Spectrem Group, in a statement. “There was a dramatic increase this month in the number who chose to invest. Millionaires, however, expressed more caution, with a rise in the number who chose to remain on the sidelines.”
Strong gains in the U.S. equity markets, lower unemployment and encouraging news from the European debt crisis all contributed to a dramatic increase in economic optimism among high-net-worth and mass-affluent investors, according to Phoenix Marketing International’s latest survey of close to 1,200 individuals released Tuesday.
In the widest swing ever recorded by PMI’s economic-outlook indicator, the optimistic trend line rocketed upward by 19% among wealthy investors – to 53% in February/March from 34% in December/January. The economic optimism trend line also increased among the mass affluent, moving to 41% from 29%.
About 28% of mass-affluent investors surveyed by PMI increased their commitment to funding their portfolios, up from 23% in the prior period. And for the third two-month period in a row, these investors indicated that they were expanding their real-estate holdings.
High-net-worth investors, though, seemed somewhat cautious in their three-month investment outlook, perhaps anticipating that the strong equity markets rally may be winding down.
“About 12% of these investors stated they would likely make net decreases in their positions, a relatively high percentage considering their ebullience over the U.S. economy,” PMI explained in its report. However, for the third period in a row, many of these high-net-worth investors increased funding for their retirement accounts.
Spectrem Group said Wednesday that its Spectrem Affluent Investor Confidence Index jumped 10 points in March to 5, the highest level in nearly five years. The index, which measures the investment confidence and outlook of households with $500,000 or more in investable assets, has posted gains for the past seven months in a row.
Meanwhile, the Spectrem Millionaire Investor Confidence Index gained six points to hit 10, the highest reading in just over a year. In both the millionaire and non-millionaire households, there was a shift toward investing in equities, signaling stronger engagement in the market, the research firm says.