Millionaires are sharply divided politically, and their politics are increasingly shaping their views of the economy and financial markets, according to the CNBC Millionaire's Survey, conducted by Spectrem Group in May 2017 on behalf of CNBC.
The survey is an exclusive semiannual summary of the investment attitudes and behaviors of investors with $1 million or more of investable assets. Seven hundred and fifty investors responded.
According to the research, half of millionaires surveyed believe the economy will be stronger in 2017. Another one-third said it will stay the same.
Most millionaires are also fairly bullish on the stock market. Fully 58 percent say the S&P 500 will be up at least 5 percent in 2017, with 15 percent saying it will be up double digits.
But Democratic millionaires are far more pessimistic. More than a third of wealthy Dems say the economy will be weaker, and half say it will be flat. By contrast, two-thirds of Republican millionaires say the economy will be stronger.
As for stocks, 38 percent of Republican millionaires expect the S&P will be up double digits this year — double the number for Democrats.
"Politics really shapes how millionaires see the economy," said George Walper, president of Spectrem Group.
Since millionaires are so partisan, you would think the two groups would be spending and investing differently. But they're not.
When you look at where they plan to put their money over the next 12 months, Democratic and Republican millionaires are investing similarly. In the next 12 months, Dems and Republicans are investing the same — nearly half in equities, about 20 percent in bonds and 15 percent in cash.
Even their spending plans are similar. Three quarters of millionaires plan to spend the same as last year, with about 15 percent spending more.
So how can millionaires have such different outlooks but such similar investment postures?
You would think, for instance, that Democratic millionaires who are down on markets and the economy wouldn't be plowing money into equities.
Walper said the continued strength in the markets despite all the turmoil in Washington is causing millionaires to set aside their politics and just ride the rally.
"Many of them just don't trust their instincts," he said. "They may be concerned, but then they see the market go up again today and the day before and they second-guess themselves. It's just such an unusual time, but it's hard to see much reaction in the markets."
Stable and rising stock markets have created a virtuous cycle, where even pessimistic millionaires see rising stocks, so they're reluctant to take money out of the markets, which supports stocks even further.
"You just haven't seen millionaires take money out of this market in a significant way, despite their views," Walper said.