Affluents & Millionaires Lose Short-Term Investing Confidence

November 5, 2008

This article is included in these additional categories:

Analytics, Automated & MarTech | Financial Services | Household Income

The current economic situation appears to have created a short-term crisis of confidence among some affluent and millionaire investors, but nearly two-thirds say they have done nothing to change their long-term investment strategy, according to research from Phoenix Marketing International.

The report, “Affluent & Millionaire Sentiment: A Crisis of Confidence,” states that more than three-quarters of America’s Mass Affluent (those with $250K to $999K investable assets) say they have less confidence in investing in the stock market as a result of recent economic events.


The financial crisis, however, has not yet caused large shifts in investment behavior among the wealthy. Overall, 65% of Mass Affluent investors say they have not changed their long-term investment strategy. Of those who have changed it, the vast majority have become more conservative.

On the other hand,? Millionnaire investors ($1M+ investable assets) – though similarly shaken by the financial crisis – appear to be viewing the economic crisis as a buying opportunity. Some 20% of millionaires bought stocks or other investments during the last three months, compared to 11% of Mass Affluent investors.


Though 62% of Millionaire investors say they have not changed their long-term investment approach, the proportion of them who plan to increase their overall investments has increased for the first time in a year, from 28% to 37%.

Additional findings:

  • More than half of the Mass Affluent and Millionaire segments have done nothing differently in the short or long term as a result of the financial and economic situation.
  • About 20% of both groups have contacted their investment advisor for advice.
  • About 10% have shifted assets or pulled assets from the stock market.
  • The largest investment reductions were in stocks and mutual fund investments, though this may be because of a reduction in the value of these investments, rather than a change in investment behavior.
  • Only 3% or less have changed their investment provider or advisor.

Opinion of Government Rescue Plan

Three-quarters of Mass Affluent investors disagree with the US government’s $700 billion economic bailout plan, but half still think it is necessary prevent a more serious economic crisis.

Millionaire investors have a more favorable perception of the government’s plan than the Mass Affluent, though the majority still do not agree with it. About 25% view it favorably, compared with only 10% of Mass Affluent investors.

About the research: The research was conducted from October 10 through October 20, 2008. Every other month, the Phoenix Marketing International Affluent Marketing Service (AMS) tracks changes that Mass Affluent and Millionaire households anticipate making to their investment portfolios in the coming three months.

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