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WAM Insights: Affluent Investors’ Upward Trends in Economic and Investment Outlooks Come to a Halt

June 7, 2021

Economic Outlook

After a steady increase since December 2020, the Phoenix Wealth & Affluent Monitor Economic Optimism decreased in May for both Mass Affluent and High Net Worth households. Among Mass Affluent households, Optimism decreased seven percentage points to 57% in May. The percent of those “unsure” about the economy remained steady, decreasing one point to 6%, but those with a pessimistic outlook about the future of the U.S. economy increased from 29% in April to 36% in May. High Net Worth households with a positive outlook on the US economy also decreased seven percentage points, from 68% to 61% in May. Pessimism increased to 33% of HNW investors this month, up from 25% in April.

Investing Outlook

The Phoenix Wealth & Affluent Monitor Investment Outlook increased notably in May among High Net Worth investors, with 47% expecting to make net increases to their investments, up from 39% in April. The reported HNW investment increase comes from those who would have otherwise left their investments unchanged, as those reporting “No Changes” decreased from 56% in April to 49% this month. Mass Affluent investors’ Investment Outlook remained steady in May, with 38% expecting to make net increases in their investments. Their Investment Outlook has remained relatively unchanged since a five-point increase to 37% in March.

Perspective

Market volatility in May 2021, along with other global macroeconomic issues are the likely culprits for ending the months-long upward trend of Economic Optimism among affluent investors. With this month’s temporary erosion in optimism, levels still remain well below pre-pandemic ratings for both audiences, though the ongoing improvements seen throughout early 2021 mean that optimism is still much higher than during the height of the pandemic. Despite the recent drop in positive sentiment, these fears have not affected affluent investors’ willingness to increase their investments. It appears that the market will experience a surge in new investment dollars, particularly among HNW households who have been planning to invest more over the last several months of results from the Wealth & Affluent Monitor Investment Outlook.

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