U.S. millionaires are undergoing a serious attitude adjustment. Rising energy costs, economic uncertainty and the aftermath of recent natural disasters is causing increased pessimism about their assets.
The Spectrem Millionaire index, which measures the investment outlook of households with $1 million or more in investible assets, dropped five points in October to zero, on a scale of negative to positive 100. Millionaires had been mildly bullish from October 2004 to August 2005. Since the inception of the index in February 2004, the scale has been as high as 25 in March and April 2004, said George Walper Jr., president of Spectrem Group, Chicago.
When asked about the biggest threat to their investment plans, 16% of respondents said the economy posed the most risk. Stock market conditions were the second-biggest threat (15%), followed by household income (8%) and household cash flow (8%).
"That's a significant impact if (affluent households and millionaires) become conservative and don't want to invest in the more active equity market, only want to be in short-term position or don't want to invest in real estate outside of a primary residence," Mr. Walper said.