Tags: confidence | wealthy | economy | Washington

Surveys: Debt Battle Deals Blow to Confidence of Wealthy

By    |   Friday, 01 November 2013 08:48 AM

Affluent investors didn't take the debt crisis too lightly, although the stock market handled it with buoyancy, two new surveys show.

During the earlier part of October, big investors lacked confidence after the latest debt debate in Washington, CNBC reported. And considering the next budget talk is right around the corner, the first quarter proves to be a period of doubt for even the most confident of investors.

The Spectrem Millionaire Investor Confidence Index, which measures the outlook for investors who have at least $1 million in investible assets, fell 15 points from September, when it reached a 9 ½ year high, to 8 in October. The index hasn't experienced such a fall since the April 2009 financial crisis.

Editor’s Note:
Opinion: Retirees to Be Hit With Social Security Cuts

"This is a vivid reminder that what happens in Washington, D.C., does not stay in D.C.," George Walper, president of Spectrem Group, a firm that focuses on wealth research, told CNBC.

According to PNC Wealth Management's Wealth and Values Survey, virtually half of investors with $500,000 or more in investable assets aren't as enthusiastic about the U.S. economy as they were before the standoff.

In addition, 62 percent said the crisis would negatively impact the economy "in both the short and longer terms," and 47 percent said they would be more cautious with their investing as a result.

"The increasingly optimistic mood of America's affluent on the economy darkened in the aftermath of the U.S. government shutdown and near default," PNC said.

While the wealthy view the economic outlook for the country as anything but promising, they are not shy to boast about their own economic well-being referencing a bright outlook for their own portfolios. The country might be headed for a meltdown, but they will be keeping their heads above water.

With an increase of 20 percent in net worth and enthusiasm over their own portfolio, the wealthy are expected to invest more in stocks and real estate, according to the PNC report.

It's highly unlikely that stocks will go down due to affluent investor's cynical views, CNBC noted.

According to Gallup's Economic Confidence Index, Americans' confidence in the economy fell to its lowest level since late 2011 earlier in October.

Specifically, confidence in the economy averaged -39 for the week ended Oct. 13, down 5 points from the prior week. That was on top of a 12-point drop during the first week of the government shutdown.

Editor’s Note: Opinion: Retirees to Be Hit With Social Security Cuts

Related Stories:

Gallup: Shutdown Hits Americans' Confidence in Economy

Consumer Sentiment Plunges to Year Low on Government Shutdown

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Affluent investors didn't take the debt crisis too lightly, although the stock market handled it with buoyancy, two new surveys show.
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2013-48-01
Friday, 01 November 2013 08:48 AM
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