Spectrem Group announced today that its Spectrem Millionaire Investor Index saw its biggest one-month drop in the index’s history in June, as wealthy investors fret over inflation.

The decline in the millionaire index in June pushed it into neutral territory for only the third time since the index’s inception in February 2004. Millionaires had been stubbornly optimistic since late 2005, remaining in mildly bullish territory for seven straight months despite four consecutive declines through June by the broader Spectrem Affluent Investor Index, the firm said.

The affluent index, which measures the investment outlook of households with US$500,000 or more in investable assets, slipped to its second-lowest level ever in June. This kept affluent investors in neutral territory, where they have spent 10 of the past 12 months.

Affluent investors and millionaires both expressed sharply higher concern about inflation, citing it as the No. 1 threat to achieving their household financial goals, Spectrem noted.

“Inflation fears have finally taken their toll on millionaires. In June, our millionaire index showed the biggest one-month drop in its history, as the broader affluent index fell to match its second-lowest level ever. The reason was inflation, which had been weighing on the financial markets since early May — at least, until the stock market’s June 29 rally,” said George Walper Jr., president of Spectrem Group. “Affluent investors saw inflation as the No. 1 threat to their household financial goals in June, after barely registering in March 2006, the last time this question was asked. Millionaires were even a bit more concerned. Over time, millionaires have tended to take the long view of the investment environment, so a decline this steep should be seen as cautionary.”

In response to an open-ended question about the biggest threat to their household financial goals, affluent investors cited: inflation (15%), the economy (12%), unemployment (7%), oil and gas prices (4%) and health issues (4%). Concern about inflation rose from 2% in March 2006, the last time this question was asked, and 8% in December 2005.

Similar to the affluent, 16% of millionaires cited inflation as the greatest threat to their household financial goals. Ranking immediately behind inflation for millionaires were the economy (11%) and health issues (5%).

The Spectrem Affluent Investor Index is based on 250, 10-minute telephone interviews each month, giving the data a margin of error of plus or minus 6.2 percentage points. Interviews are conducted with the financial decision-makers in households with US$500,000 or more in investable assets. The Spectrem Millionaire Investor Index is based on a subset of the overall survey group that can vary each month.