By Hal M. Bundrick
NEW YORK (MainStreet) Investors have been spooked, and it's not the zombie on the front porch grabbing the handful of mini Snickers bars. Washington is giving them the willies.
A Spectrem Group survey asked affluent investors how they would be investing in the coming month, and nearly half (45.75%) said they would be running to the sidelines. That's an increase of 15% over the previous month, which was the lowest level of investor confidence since March of 2012.
Investors who said they would be buying stocks dropped 16 points to 24.7%, the lowest reading since September 2011 and an unprecedented month-to-month drop in the more than nine years the poll has been fielded.
Stock mutual funds were also out of favor with investors surveyed, with a drop of eight points to 30.96%, a nine month low. Even cash seems to offer little comfort to investors that have been put into a panic by politics. Just over 21% intended to move to cash and that's a five-month low.
So, what's left to buy?
Bonds? Investors said no. The intention to buy bonds dropped five points to 5.77% to a six-month low, while bond mutual funds and real estate each fell one point to 12.96% (another nine-month low) and 7.3%, respectively.
The survey of investors was also broken down to reveal the attitudes of millionaire compared to non-millionaire households. Non-millionaires were particularly perturbed, with "Not Invest" jumping 14.6 points to 61.9%, a nine-month high. Stocks dropped 11.7 points to 15.4%, the lowest reading since September 2011. Cash dropped 16.3 points to 11.5%, a six-month low. Bonds, bond mutual funds and real estate all posted declines.
Households with bigger bucks were a bit less depressed by this month's debt debacle, although "Not invest" increased 12.7 points to 30.8% for millionaire investors. Stocks dropped 17.5 points to 33.2%, a seven-month low. Stock mutual funds fell 11.5 points to 39.4%. Bonds and real estate dropped 4.2 points and 4.7 points, respectively, while the intention to invest in cash was unchanged from last month's 30.3 points. Real estate edged up 0.7 of a point to 18.5%. Stock mutual funds were the one investment vehicle that remained steady, ticking upward at 0.1 of a point to 21.9%.
--Written by Hal M. Bundrick for MainStreet