Confidence among affluent investors in the United States climbed into neutral territory in November for the first time in almost two years, tracking an increase in asset prices. But sentiment was still someway from being bullish as the economic recovery remains tentative.
The Spectrem Group's affluent investor confidence index, which measures sentiment among investors with at least $500,000 of investable assets, rose 5 points to -10 in November, its highest level since February 2008, when it was last in neutral territory.
The Chicago-based consulting firm, which specializes in affluent and retirement markets, defines neutral as between -10 and +10 in the index which ranges from -100 to +100.
Affluent investors, many of whom rely on the stock market for their fortunes, took a severe hit during the financial crisis as world stock markets plummeted and sent confidence crashing.
Since then the S&P 500 .SPX has gained 64 percent after it bottomed on March 9. The index is up 23 percent since the start of the year. Stock prices around the world have rallied on government stimulus measures and hopes of an economic recovery.
But many investors have remained distrustful of the rally and are cautious about prospects for a sustained economic recovery. Some analysts even expect a so-called "double-dip" recession where major economies shrink again shortly after returning to growth in the third quarter.
Spectrem's millionaire investor confidence index, based on a survey of investors with at least $1 million of investable assets, advanced 3 points in November to -4, its fourth-straight neutral reading.
Despite concerns over the economy, 32 percent of affluent investors said health care reform was the factor that most influenced their economic outlook, according to Spectrem.
That was followed by unemployment, cited by 11 percent, the economy at 10 percent, and the political environment with 7 percent. Only 6 percent cited stock market conditions and 5 percent housing and real estate.
Millionaires expressed slightly less concern about health care reform (30%) than the affluent but were more worried about unemployment (14%).
Spectrem's survey is based on 250 monthly interviews with the financial decision-makers in households with at least $500,000 or more in investable assets.
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