Affluent Investors’ Optimism Declines in August

Optimism among wealthy U.S. investors polled monthly by a consulting firm fell in August to its lowest level this year as uncertainty about the outcome of the U.S. presidential election and higher fuel prices eroded their economic outlook.

Chicago-based Spectrem Group said Wednesday that its “affluent investor index” hit a 2004 low of 5 in August. The index’s most aggressive investment orientation is 100.

“Just three months from election day, investors cited the presidential race as their biggest cause for concern about the economy, followed closely by higher oil and gas prices and to a lesser extent the Iraq war,” said George Walper, president of Spectrem Group.

“Affluent investors grew increasingly pessimistic in August, with their investment outlook declining close to bearish levels,” Walper said. “With political issues front and center, it’s not at all clear what, if anything, will reverse this negative trend in sentiment prior to Nov. 2.”

The proportion of wealthy investors indicating that they did not intend to invest at all rose to 36% in August from 29% in July.

“An election year is a period of uncertainty,” said Ken Paterson, director of Spectrem. “It’s a truism that markets hate uncertainty, and there is no answer until Nov. 2.”

The Spectrem affluent investor index is based on 250, 10-minute telephone interviews each month.