Investor sentiment is the stuff from which market behavior is made. As one person commented on Twitter following Apple’s earnings report, “$AAPL makes 13 bucks/share, falls 30 points. $NFLX makes 13 cents/share, rallies 30 points.” It’s all in how investors interpret the market. And given that the rules for “qualified” investors are based primarily on wealth, those with plenty of money at stake are surely a good barometer of the investing climate… so a recent poll of their top concerns contains some valuable insight, right? Reuters reports:

Dysfunction in Washington is the top concern for wealthy investors, trumping fears about their ability to retire and the economy overall.

That is what UBS AG’s Wealth Management Americas found in a poll released on Thursday of over 2,000 of Americans who have at least $250,000 to invest. Similar trends were evident to many of the financial advisers – 19 in all – that Reuters recently interviewed about their clients’ current state of mind.

Much of wealthy clients’ frustration with Washington is centered on the end of 2012 “fiscal cliff” negotiations, which resulted in a last minute deal that raised taxes for the wealthy while maintaining lower tax rates for most Americans.

Washington politics to be investor’s #1 concern? Tax rates are clearly important, and government spending does amount to more than 20% of GDP… but for government to weigh more heavily on the minds of investors than the rest of the economy as a whole? If that’s not a warning sign to our politicians, we don’t know what is.

On one hand, we can’t really blame these investors. The dysfunction in Washington makes a great recipe for attracting eyeballs to news content, online or on TV. After being pummeled with episode after episode of our never ending fiscal crisis/reality TV show, it’s not hard to see why political bickering would top investor concerns. In the end, it becomes a self-fulfilling prophecy. The more investors watch Washington (and make investing decisions based on government policies), the more markets will continue to move in sync with those decision. Which, in turn, makes those decisions more important for investors to watch.

Can the cycle be broken? Well, perhaps if we had a long-term picture of what government policy was going to look like; if we could count on Washington to consistently make predictable, rational policy based on the best economic interests of the country; if posturing and pettiness from both parties took a back seat to compromise and responsible decision-making…

So, probably not.