The sentiments of wealthy Americans soared during this year's first quarter .
Affluent investors are bullish over strong market performance and optimism over tax and regulatory policies proposed by President Donald Trump, according to the latest investor confidence index scores reported by Chicago-based Spectrem Group.
The Spectrem Millionaire Investor Confidence Index, which measures the optimism of investors with more than $1 million net worth, doubled to 20 in April from 10 points in March. During the same period, the Spectrem Affluent Investor Confidence Index, which measures the optimism of investors with more than $500,000 net worth, rose from 6 to 10 points.
Confidence is measured on a range from -51, for highly bearish sentiments, to 51, for a bullish outlook. Spectrem considers values between -10 and 10 to be neutral.
Millionaire investor confidence hit its 12-month low in May and September 2016, when Spectrem’s Index registered a 5, while affluent investor confidence also bottomed in May 2016, when Spectrem’s index hit zero.
George Walper, Spectrem Group president, said that April’s confidence indices indicated the most bullish investor sentiment in “years.” The 10-point rise in the Millionaire Investor Confidence Index represents the largest month-to-month increase since January 2014 and marks the third time in the last decade that the score has reached 20.
“The sudden uptick in confidence among millionaires in April is likely a reaction to a strong first-quarter performance in the markets, with the S&P 500 Index and NASDAQ rising nearly 6 percent and 10 percent, respectively, during the period,” said Walper in a released comment. “More than a third of those surveyed indicated that stock market conditions are the one factor that most affects their investment plans right now.”
Similarly, the Affluent Investor Confidence Index has reached its highest level since July 2015, and is up six points year-over-year.
As a component of its indices, Spectrem also measured the Millionaire Household Outlook, a combination of respondents’ qualitative views on income, the economy, the financial health of the companies they work for and their household assets. At 33.4 in April, the Millionaire Outlook is at its highest level since 2014.
As a result, roughly one-in-four of Spectrem’s millionaires said that they would hold off on investing during May, a 20-month low, while 50 percent of the same cohort said that they would invest in stock mutual funds, a 39-month high.