Economic confidence among affluent Americans had one of its biggest revivals in two years last quarter as investors looked to head back into equities markets, according to a survey released today by KeyCorp's McDonald Financial Group.
Its Affluent Consumer Confidence Index rose seven points during the quarter, to 55. That was a 15% rise from the survey results released in October, when the index fell 13 points as investors worried about the presidential election.
"The results were very different from the previous quarter, and that indicates that a lot of the negative publicity and negative nature of the presidential election was affecting confidence for investors," said David Legeay, a senior vice president at McDonald Financial.
The survey said 65% of those questioned said the economy is headed in the right direction and 61% said they feel better about their finances than they did four years earlier. In the previous quarter, 33% said they felt their financial situation was better than four years before.
"It is a local-national thing," Mr. Legeay said. "Affluent investors feel better about the local economy than they do about the national economy as a whole, but while they feel good locally they are still worried about the guy across the street. We were paying so much attention to the election and the job numbers on the evening news. People felt good about themselves, but they were worried about the national landscape."
Mr. Legeay said better market conditions and strong economic data have turned affluent investors much more positive. More than 60% of those questioned said they believe the Standard & Poor's 500 index will rise in the next three months, and 30% plan to invest more this quarter, up from 18% in the October results.
Forty-eight percent of respondents said they were focused on accumulating rather than preserving wealth, up from 23% the previous quarter when, Mr. Legeay said, 71% said they were focused on wealth preservation. That was 15 points higher than any measure of preference for wealth preservation since McDonald started the survey in October 2002.
The rise in affluent people's confidence returned the index to a level similar to a year earlier.
The quarterly study is based on a national survey of randomly selected people with investable assets of $500,000 or more, or personal annual income of at least $150,000.
