Affluent Americans anxious, frustrated, acting on market worries
The number of market pessimists among Americas wealthy is slightly higher than optimists, according to a new survey.
Nearly half (47%) of the wealthy characterize the U.S. financial system as broken, while 84% believe the U.S. political system has serious flaws, the PNC Wealth Management survey found.
Pessimists (34%) now outnumber optimists (26%) when evaluating the prospects of their investment portfolios in the next six months.
The survey captures the anxiety and frustration of the economic and political environment that we are in, said Thomas P. Melcher, executive vice president and managing director of Hawthorn, the division of PNC Wealth Management that serves clients with $20 million or more in investable assets. These results clearly tell us wealthy investors are looking for more positive news to get them back on a more confident path. But the bottom line remains: investors should look to the long-term horizon and determine their own risk tolerance. Over the years, contrarian investors have made a lot of money buying the doom and selling the boom.
Despite that negativity, wealthy investors show more balance in their views about how well they will do personally over the long-term despite worries about the U.S. economys long-term prospects. Exactly 81% of respondents are at least moderately confident that they can maintain or grow their assets in the longer term and 27% are confident their assets will grow, while just one in five (19%) fear a long-term loss of assets.
Exactly 34% indicate that they have made specific investment moves during the last few months in response to market volatility. Among that group, one-quarter of them (28%) say they mad more conservative investment moves, while 6% say theyve become more aggressive.
Those who describe themselves as stronger stock buyers (11%) slightly outnumber net stock sellers (9%). The more conservative moves primarily were money into cash (20%), but 8% bought gold or other commodities, and 4% bought Treasuries.
Affluent investors continue to look to three industry sectors – technology, energy and health – for the biggest investment gains over the next year.
Showing the lowest investor interest are retail (which declined from 11% considering this a good investment last year, compared to 6% this year); financial (decline from 27% to 17%) and the socially responsible/green sector, which dropped as a perceived good investment from 26% to 14%.
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