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Stock Market Volatility Starting To Spook Wealthiest Investors

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When the biggest investors are starting to feel the pressure from rising volatility in the markets, that doesn’t bode well for future prospects of stocks and the economy.

The New York Post reports that some of the richest investors are starting to opt for lower-risk options like certificate of deposit investments rather than the volatile stock market. ET Intelligence Group’s numbers seem to suggest a potential global slowdown, with about $13 trillion of value that went down the toilet last year.

The Spectrem Investor Confidence indexes indicate that investing in cash was the only asset class category that increased in interest last month. According to The New York Post, the level of confidence coming from this class of investors is at its lowest point since August of 2013. This most recent survey came during a holiday season when markets were having multiple bad days in a row and entering bear territory.

“In periods of uncertainty, the wealthy tend to be more concerned with asset protection rather than growth,” Joseph Biondolillo, principal at financial planning firm Biond Financial said. “They tend to be defensive-oriented, and willing to wait for the dust to settle and for all the facts to be in.”

Spectrem President George H. Walper, Jr. went into more detail about the Spectrem indexes, which focus primarily on households that have at least $1 million in what are considered investable assets. “Significant financial market declines in the first half of December, which have continued, are negatively affecting investor confidence,” he said.

The Jewish Voice reported about the mixed feelings heading into 2019, with a historically bad day of trading on the half-day before the Christmas break but a number of economic measures still signaling potential positives. Shoppers also conveyed a bright future to Wall Street. Retail sales grew a robust 5.1 percent from Nov. 1 to Dec. 24, according to Mastercard Spending Pulse. Shoppers spent over $850 billion this year, indicating the strongest growth in the last six years. Online sales were also up 26.4 percent from the Wednesday before Thanksgiving through Black Friday. Overall in 2018, online shopping rose 19.1 percent, in comparison to 2017.

Apparel led the holiday shopping momentum, with a growth rate of 7.9 percent compared to 2017, recording the best growth rate since 2010. Department stores finished the season, from Nov. 1 through Dec. 24, with a 1.3 percent decline in comparison 2017. Though this may prompt more store closures, the online sales growth for department stores was quite reassuring, with growth of 10.2 percent. Electronics and appliances holiday sales fell 0.7 percent. Home improvement spending, however, made up for it, soaring 9.0 percent during the holiday season. The home furniture and furnishings category also grew 2.3 percent.

By: Elizabeth Fornan

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