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W&AM Insights: Affluent Investors Remain Focused on Waiting Out COVID-19 Pandemic

June 2, 2020

Economic Outlook

This month’s W&AM Economic Optimism trend line remains near the all-time low ratings from March and April 2020. Even though W&AM Economic Optimism improved among HNW in May to 29% (up from 23% in April), and only saw a 2% decline (from 32% to 30%) within Mass Affluent, optimism for both segments is still less than half of typical levels prior to the COVID-19 pandemic. Very few affluent investors are unsure about their level of optimism – only 6% of Mass Affluent and 2% of HNW – reinforcing how distinctly pessimistic most consumers still feel right now about the country’s economic outlook in the next three months.

Investing Outlook

W&AM Investment Optimism ratings stay relatively steady versus the prior month, as the most frequent outcome for both HNW and Mass Affluent consumers is once again to make no changes to their investments and finances. This is particularly evident among Mass Affluent consumers, of whom 65% plan to make no investment changes in the next three months, compared to roughly 3 in 10 that will increase theirs. Additionally, 53% of High Net Worth households with already more than $1 million in assets plan no changes to their level of investment over the next three months. In recent months, close to half of HNW investors had still planned to increase their net investments, and that segment now constitutes only 33% of HNW.

Perspective

Amidst the continued economic uncertainty and volatility arising from COVID-19, affluent investors in the US continue to feel negative about the near future, as the W&AM Economic Optimism trend line is still less than half of what it was prior to the pandemic. As a result of their pessimism and doubt, understandably many of both Mass Affluent and High Net Worth households plan to “stay the course” as much as possible with their investments and finances in the next three months. Despite some states reopening businesses and relaxing restrictions, many others continue to struggle with new cases and deaths and remain under similar quarantine policies as the last several months. Given the lack of clarity regarding a potential vaccine or how the country as a whole may start to return to “normal” (e.g. summer travel, dining out, etc.), affluent consumers are still focused on protecting their assets in May 2020, with little indication that optimism about the economy will return soon.

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