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Portfolio > Economy & Markets

Investors’ Confidence Cratered in Q3: J.D. Power

By Michael S. Fischer

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In the third quarter, investor confidence plummeted 37 points to 596 (on a 1,000-point scale), according to the J.D. Power U.S. Investor Confidence Index. The decline in confidence came against a backdrop of the S&P 500 index decline of 23% through the end of September, inflation up 8.2% during this period and a possible recession.

Even so, 89% of investors with at least $100,000 in investable assets told pollsters in September that they plan to maintain or increase investment accounts over the next quarter. Seventy-one percent said they feel better than a year ago, or the same, about where they are financially.

The polling sample included 1,929 U.S. adult consumers.

The survey found that growing concern about the ability to keep up with inflation is the overriding factor contributing to the decline in investor confidence. Only 27% of respondents said they were highly confident they could do so, down from 35% in the second-quarter survey.

At the same time, keeping up with inflation scored much lower than other factors — including capital preservation, preparing for retirement and planning for major purchases — across all wealth segments, from investors with $100,000 in investable assets to those with $1 million or more.

Female investors in the survey had investor confidence scores of 553, compared with 628 for male investors. Younger investors scored higher than older ones: 678 for Generation Z and younger millennials versus 588 for Gen Xers and older millennials versus 566 for baby boomers and older investors.

Although investor confidence fell sharply in the third quarter, the decline was less pronounced among full-service investors — those who work with a dedicated financial advisor — according to the survey.

The average overall confidence score for investors with full-service advisors was 622, which compares with 589 for those with robo-advised accounts and 572 for self-directed investors.

Michael S. Fischer

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