The Spectrem Affluent Investor Confidence Index (SAICI) fell for the second consecutive month in May, losing 7 points to arrive at -5. SAICI measures the investment confidence and outlook of households with $500,000 or more in net worth. Millionaires aren’t optimistic, either, according to Spectrem’s Millionaire Investor Confidence Index (SMICI), which dropped 5 points to 3. That’s its biggest loss in nearly a year.
The economic woes of Europe are weighing heavily on the affluent. “The ongoing European Zone crisis and its impact on the global economy is the news story that is most affecting their economic outlook,” George H. Walper, Jr., president of Spectrem Group, said in a statement. Unemployment and the domestic political environment also taking a toll, but the situation at home seems not quite as worrying as conditions internationally.
The affluent are sitting out the markets and putting more of their holdings into cash rather than investments. Those choosing the option of cash holdings increased 5 points in May to 26.1, and although those continuing to invest in stocks did edge up 1.8 points to 32.4, all other investment categories fell. Those choosing not to invest at all rose 1.6 points to 36.8, the highest reading in six months.