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Investor Confidence Nudges Upward

Investors are not likely to return to pre-coronavirus levels of confidence about investing any time soon, but they are keeping a watchful eye on current stock market performance while maintaining their low level of confidence displayed in April.

Spectrem’s Investor Confidence Indices, which plummeted in April as investors reacted strongly to the stock market crash resulting from economic reaction to the coronavirus, nudged in a positive direction in May while remaining at a very low level.

The Spectrem Affluent Investor Confidence Index (SAICI®), which measures investment intentions for investors with at least $500,000 in investable assets, rose from -12 to -10 in May after recording a 13-point drop in April. The Spectrem Millionaire Investor Confidence Index (SMICI®), which measures investment intentions for investors with at least $1 million in investable assets, rose from -8 to -6 in May after its own 15-point drop in April. The last time the SMICI reported a negative confidence rating in consecutive months was in November and December of 2012.

The indices are comprised of a number of elements. Investors are asked their investing intentions for the coming month, and in May, the most demonstrative decision was to pull back from investing or maintain current levels of allotments. Among non-Millionaires, 47.5 percent chose not to increase investing for the coming month, and that was an even higher percentage than the 44.3 percent who made that decision in April, when investors were really reeling from the impact of the virus on the stock market.

Among Millionaires, 39.1 percent indicated they were not going to invest more in the coming month. That is the highest percentage of non-involvement among Millionaires since May of 2017, two years ago.

There was, however, one notable area in which interest increased. Individual stock investing interest rose from 28.40 in April to 30.40 in May, as some investors looked to take advantage of low stock prices, anticipating an eventual return to higher numbers in the near future. It has been almost a year since the last time 30 percent of investors expressed an interest in increased individual stock market investing.

Related: Do Investors Think the U.S. is Re-Opening Too Soon?