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Millionaires Again Less Bearish than Affluent: Spectrem

Date: Thursday, June 5, 2008
Author: Christopher Faille, Senior Financial Correspondent, Hedgeworld.com

†CHICAGO (HedgeWorld.com)óRespondents to the Spectrem Group's surveys in May returned to normalcy in one respect, after an anomalous showing in April. Once again, the narrower millionaires' families segment of the population indicated that it is more bullish (or, rather, less bearish) than the broader affluent families' segment.

Last month, the millionaire reading stood at negative 14, the affluent index at negative 13. But the latest results show millionaire sentiment up to negative 9; affluent sentiment stuck where it was.

Spectrem's Affluent Investor Index is based on a survey of households with $500,000 or more in investable funds, which places their sentiment on a scale from positive 30 to negative 30, with neutral ground running from positive 10 to negative 10. Since mildly bullish or bearish terrain begins at 11 and ends at 20 on either side of the scale, the affluent at negative 13 are in the mildly bearish zone, while the millionaires have moved, just barely, into neutrality.

But even with the improvement, the millionaires' mood is still 29 points below where it was last June, and 17 points below where it was in December. It is at its third-lowest record ever.

"With concerns over increasing gas and oil prices spiking for both groups in May, the investment sentiment of the wealthiest Americans is moving into the summer on anything but a high note," said George H. Walper Jr., president of the Spectrem Group, in a statement.

In response to an open-ended question about the news story most affecting their economic outlook, affluent investors in May cited increasing oil and gas prices 45% of the time. The second most frequently cited story (housing and real estate) was far behind that, at 13%. The last time this question was asked, in February, only 6% chose increasing oil and gas prices.

Millionaires, asked the same question in May, expressed somewhat less concern than the affluent with oil and gas prices, although for them too it still ranked as easily their greatest worry. Forty percent of them named it as such. They also were concerned about housing and real estate, 17%; and election results, 11%.

Mr. Walper is the author of a book with Catherine S. McBreen, Spectrem's managing director, about the wealth accumulation secrets of America's richest families, titled, Get Rich, Stay Rich, Pass it On.

The results of these surveys are announced on the first Wednesday of every month. Spectrem Group is a strategic consulting firm that specializes in the affluent and retirement markets, integrating proprietary research with expertise in building business, marketing and acquisition strategies.