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Affluent Investors’ Confidence Grows in November: Spectrem

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While affluent investors are feeling more positive about their personal financial situation in November, they remain wary of market conditions and concerned over recent terror attacks and continued threats, according to a recent Spectrem Group survey.

The Spectrem Affluent Investor Confidence Index gained 3 points in November, rising to 7. The Spectrem Millionaire Investor Confidence Index gained 9 points, rising to 15.

Both indexes are at three-month highs.

The November indexes show a significant pick up from October, in which both indexes fell despite the Dow and S&P 500 achieving their best monthly market performance in four years in October.

In October, the Millionaire Investor Confidence Index fell by 8 points in October to 6, its second monthly decline. During the same period, the Spectrem Affluent Investor Confidence Index dipped by a third to 4.

The indexes, compiled by market research and consulting firm Spectrem Group, measure the investment confidence and outlook of U.S. households with more than $500,000 of investable assets (affluent investors), and those with $1 million or more (millionaire investors). This month’s survey was fielded between Nov. 16 and Nov. 22.

According to Spectrem, news stories about terrorism – more than reports about the economy, oil prices or the political environment – are having the biggest impact on affluent investors’ economic outlook.

When asked in November what story in the news was most affecting their economic outlook, one-third of affluent respondents said “terrorism.”

This is significantly greater response than others: the political environment (12%), international problems (9%), oil prices (4%), the economy and unemployment (3% each) and stock market conditions (2%).

On Nov. 13, terrorists killed 130 people in Paris.

“Despite rising optimism about their personal financial situation tied to favorable economic reports in November, affluent investors remain cautious and uncertain about the market,” said George H. Walper Jr., president of Spectrem, said in a statement. “Among their concerns include lingering doubts about the direction of the global economy, the ongoing threat of terrorism following the horrific attacks in Paris and the strong likelihood of a December rate hike by the Federal Reserve.”

According to this month’s survey, 10% of affluent investors indicated that a rise in interest rates was the news story most affecting their economic outlook. 

Fed officials indicated on Nov. 18 – during the fielding period for Spectrem Group’s survey – that they expect to raise interest rates before the end of the year for the first time since 2006.

Not surprisingly, the “interest rates increase” response to Spectrem Group’s survey has increased since February of this year from 3% to 10% in the November survey.

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