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Millionaires Jump Back In, Non-Millionaires Step Back

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Millionaires Jump Back In, Non-Millionaires Step Back

It was difficult not to get excited about stock market investing in the month of November, and Millionaire investors decided to take advantage of a seemingly endless bull market. Non-Millionaires, not so much.

The Spectrem Investor Confidence Indices showed a marked difference in the attitudes of Millionaires and non-Millionaires in November, even though the overall confidence marker rose among all investors. It is noteworthy that Millionaires seemed to accept the performance of the stock market record highs in November while non-Millionaires were less impressed, or had a stronger focus on impeachment talks and the impact of continued trade wars with China than on the stock market.

Affluent Investors

Here is a comparison of investing intentions as reported in the Spectrem Investor Confidence Indices for November based on specific segmentation:

Millionaires vs. Non-Millionaires

A look at stock market investing intentions shows the difference between the two wealth segments. Millionaires increased their interest in individual stock investing while backing away from all other product types, including a 2.5 percent drop in interest in stock mutual fund investing. Millionaires also severely dropped interest in the safer investment options like cash, in which only 19.5 percent of Millionaires intended to increase investment in. That is the lowest percentage among Millionaires in that product category since August of 2018.

Non-Millionaires backed away from stocks and increased interest in bond investing. There was a 3 percent decrease in interest in stock mutual funds among non-Millionaires to 23.8 percent, and even a small drop in cash investing as well.

What was most telling about the wealth segmentation in the Spectrem Investor Confidence indices is that both Millionaires and non-Millionaires reported an increased intention to back away from added allocations in December. Among Millionaires, 34.4 percent of investors said they were not increasing investments, and among non-Millionaires, 50.8 percent reported plans to add nothing to their portfolio levels. Among non-Millionaires, that is the highest percentage since May of 2019.

Men vs. Women

For some reason, female investors were more impressed with the stock market than male investors. Female investors increased their investment intentions in individual stocks and stock mutual funds, and decreased their percentage of investors backing away from the markets all together. In fact, fewer female investors (39.3 percent) than male investors (44.0 percent) reported intentions to stay out of increased market participation in December, and that rarely happens.

Male investors did not increase any of their investment percentages, and the decrease in interest in stock mutual funds was stark, from 40.8 percent to 27.1 percent. Even cash investing went way down among males, from 28.3 percent to 21.1 percent.

Overall confidence among female investors moved into positive territory for both the Millionaire and Affluent investors for the first time in 2019.

Republican vs. Democrat

Perhaps investors who vote Democratic were buoyed by impeachment issues related to President Donald Trump, whom they likely do not approve of. Democratic investors reported increased interest in stock investing, bond and bond mutual fund investing, and had a deep decrease in those not investing in the coming month. In fact, there was a higher percentage of Democratic investors investing in individual stocks and stock mutual funds than Republicans, and like the male-female perspective, Democrats rarely express greater interest than Republicans.

Republican investors, in fact, decreased their interest in stock, stock mutual fund and bond investing, and had one of their highest level of non-participation in investing for the month of December. The level of Republicans not investing more in December reached 48.42 percent, much higher than the 37.50 percent of Democrats not investing.

The overall indices rose for both Republican and Democratic Millionaires, and rose among affluent Democrats, but affluent Republicans had a stable overall confidence index number. The Millionaires confidence index for Democrats was at 13 compared to just 4 for Republicans.

Working vs. Retired

The improved confidence level among investors in November was purely driven by working investors. Retired investors were unimpressed by stock market gains.

Working investors increased their intention to invest in individual stocks by more than 10 percent, from 25.4 percent to 36.6 percent. They also dropped their percentage of those not investing to 29.1 percent, dipping below 30 percent for the third time in the last four months.

Retired investors went the opposite direction. Interest in individual stock investing fell to 15.4 percent from 27 percent, and stock mutual fund investing interest fell from 24.7 percent to 16.4 percent. There were also decreases among retired investors in bond and bond mutual fund investing, and those not investing in the coming month rose to 57.7 percent after dropping to a 2019-low of 46.1 percent in October.

Related: The Blissful Ignorance of Future Parents

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