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Just an Online Minute... Missing Millionaires

If it’s the rich and famous crowd you’re trying to reach, your target market is shrinking.

According to a new study from NFO WorldGroup, America's "millionaires club" is getting smaller, registering the first decline in over a decade.

NFO says that the number of American millionaires fell by 11% in June 2002 compared to a year ago. In the early stages of the current bear market, from mid-year 2000 to mid-year 2001, the number of millionaires basically stayed the same largely due to the strength of their diverse portfolios, but that’s no longer the case. The number of millionaire households fell from about 3.7 million at mid-year 2001 to 3.3 million at mid-year 2002.

With the decline in their numbers also comes a decline in the overall financial confidence of these millionaires. The Affluent Confidence Index, a measurement of the sentiment of wealthy Americans toward their personal financial situation and of the economy as a whole over the next six months, fell from 16.2 to 15.5.

The study revealed that millionaires have become less likely to take calculated risks when investing. Nearly two-thirds describe themselves as becoming much more conservative in their investment approach in the past year. Not surprisingly, there has also been a sizeable shift toward an investment objective of wealth preservation rather than wealth accumulation.

Interestingly, not all segments of the affluent market fared as poorly as the million-plus group. The study estimates that the so-called "mass affluent," households with net worth between $500,000 and less than $1 million, declined only about one percent from the 3.6 million recorded in 2001. And way up-market, households in the $5 million-plus category experienced a modest increase in numbers, from about 480,000 households to 483,000.

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