Looks like the
one percent is joining the
99 percent...and shunning stocks:
"For the Rich, Diamonds are
the New Stocks" (CNBC)
show that the wealthy are pulling back from stocks and stashing more of their
money into real estate, art and even diamonds.
A recent survey
from Harrison Group and American Express Publishing found that the wealthy
have cut back their allocations to stocks dramatically since the economic
crisis. In 2007, the top one-percenters (by income)
invested 76 percent of their savings into stocks and financial investments.
Now, it’s closer to 46 percent.
That may not
sound like an important drop. But the wealthiest one percent own more than half of the individually held stocks in the
U.S. When they stop buying, it matters.
All that cash
on the sidelines may continue to grow. Harrison Group’s Jim Taylor
predicts that total savings stashed away by the affluent could grow to $12
trillion by 2014, about double today’s levels.
A second study
from Spectrem Group finds that millionaires are
also pessimistic about stocks. The survey found that investor confidence
among those with $1 million or more in investible assets dropped in April for
the first time since last summer, when the U.S. debt crisis and Euro crisis
started weighing on markets.
concerns for millionaire investors were (in order) the prolonged economic
downturn, the political environment and national debt.
So what are the
wealthy doing with their money?
they’re looking for hard assets, collectibles and real-estate.
circumstances, it kind of makes you wonder why share prices are still as high
as they are.
Michael J. Panzner