Affluent investor confidence rose in November, but this group probably won’t be bullish about investing until unemployment declines.

Spectrem Group announced Wednesday that its Spectrem Affluent Investor Confidence Index rose five points in November to –10, reaching neutral territory for the first time in nearly two years.

The increase in the index, which measures the investment confidence and outlook of households with more than $500,000 in investable assets, follows a two-point decline in October. It brings the index to its highest level since February 2008, when it reached the same level.
The Spectrem Millionaire Investor Confidence Index rose three points in November to –4, its fourth-straight neutral reading.

George H. Walper, the Chicago research company’s president, said in an interview Wednesday that affluent investors are “approaching the future with some level of continued caution.” Unemployment needs to improve before affluent investors really begin to reinvest, he said. “Unemployment really drives confidence,” Walper added.  “Until it improves we will still have fluttering confidence levels.”

Walper said that unemployment continues to decline “but we are over 10%, it is going to take more time to get back to that 6% to 8% range that wealthy investors are comfortable with.”
He added: “The last thing to improve after an economic collapse is unemployment and right now companies still aren’t racing to hire people.”

In response to an open-ended question about the news story most affecting their economic outlook, affluent investors in November cited: health care reform (32%); unemployment (11%); the economy (10%); the political environment (7%); stock market conditions (6%); and housing and real estate (5%).

Millionaires expressed slightly less concern about health care reform (30%) than the affluent but were more worried about unemployment (14%).

“The headlines have suggested that the wealthy are going to be taxed and charged for these healthcare reforms,” Walper said. “These people are worried about how this reform could impact them economically.”

The Spectrem Affluent Investor Confidence Index is based on 250 monthly interviews with households with $500,000 or more in investable assets. The Spectrem Millionaire Investor Confidence Index is based on a subset of the overall survey.