US investor sentiment rebounded significantly in February following the first significant market correction in more than two years, according to Spectrem Group.
The Spectrem Millionaire Investor Confidence Index (SMICI) and the Spectrem Affluent Investor Confidence Index (SAICI) both increased by three points in the month, now standing at 18 and 12, respectively. Both indices are now in mildly bullish territory.
The monthly Spectrem Investor Confidence indices track changes in investment sentiment among the 17 million households in America with more than $500,000 of investable assets (SAICI), and those with $1 million or more (SMICI).
While investors expressed a renewed interest in investing in stock and stock mutual funds, the Spectrem Household Outlook uncovered growing concerns about the long-term future of the economy. The outlook, which is a monthly measure of the long-term confidence among investors across four financial factors which impact a household’s daily life, dropped to 29.90 after reaching a 13-year high of 39.60 in January.
The results were due primarily to a decline in sentiment toward long-term prospects for the American economy. The outlook for the economy fell to 21.20 overall, a drop of more than 22 points, as investors expressed concern that the continued bull market may be increasingly disconnected from the overall economy.
“Recent tax cuts have driven a resurgence in investor interest in actively participating in the markets,’’ said Spectrem President George H. Walper, Jr. “However, the reduced Household Outlook is an indicator that investors are uncertain about longer-term prospects for the overall economy, perhaps because of the new tax regime’s impact on the US budget deficit.”