Confidence among affluent US investors increased significantly in March 2009 according to TNS, which reported that its Investor Confidence Index climbed to 14.0, a rebound to levels seen in May, 2008.
This increase follows a dismal October 2008 score of 13.0, the lowest since the index launched in 2001. While still well below 2007 levels (16.0), this positive increase in the current economic climate may indicate movement toward a more optimistic viewpoint, TNS said.
The index, which gauges respondents’ outlook on multiple financial measures over a six-month period, finds that despite concerns about employment, 79% of affluent Americans expect improvements in their household’s overall financial situation (up from 69% in October 2008), while 69% expect improvements in the value of their household investments (up from 52% in October).
Other expectations:
Stock Market Recovery Drives Optimism
According to TNS, the March rebound directly coincides with the stock-market recovery and signals cautiously renewed optimism among a group that has suffered significant losses since May 2008. An overwhelming majority (86%) of affluent responders have experienced a decrease in the overall value of their investments in the past six months, while three in four have experienced a 25% or more reduction in the value of their investments.
Investors Remain on Lookout for Better Deals
The research also reveals that the number of affluent investors who moved their assets among providers remains flat (22% in March 2009 vs. 23% in October 2008). However, these are historically high percentages that indicate investors are still on the lookout for better offers and/or products, TNS said. Planned switching of assets among providers in the next 12 months also remains high but has leveled off between October (21%) and March (19%).
“Clearly the March stock-market recovery was a major influence on the index as well as the administration’s recent economic measures,” said Ellen Sills-Levy, SVP of investment research services for TNS. “The market always responds worse to uncertainty than to anything definitive – positive or negative.”
About the index: The Investor Confidence Index is part of TNS Affluent Market Research Program (AMRP) and was conducted online by TNS from March 24-31, 2009. There were 2,382 respondents, each of whom had a total net worth, not including their personal residence, of $500,000 or more as of May 2008.
