Rich Americans are investing it safe
Newsday.com -- BY REGINA MARIE GLICK, STAFF WRITER -- June 22, 2004
newsday.com
The economy may be looking up, but the wealthiest Americans still are hedging their financial bets, according to a new survey.
Saying terrorism is their biggest economic concern, Americans with the largest incomes are remaining conservative in their investment strategies, according to the 2004 U.S. Trust Survey of Affluent Americans. The survey polled 150 people with the top 1 percent of U.S. incomes, those with a pre-tax annual income of more than $325,000 or a net worth greater than $5.9 million.
"I think investors are still concerned about the potential for additional terrorist attacks and are particularly concerned about rising gas and oil prices and the uncertain political crisis in the Mideast," said Pearl Kamer, chief economist for the Long Island Association.
According to the survey, conducted by investment management company U.S. Trust, 90 percent of the nation's wealthiest citizens said they were primarily concerned about the effects of terrorism on the economy. That figure was 4 percentage points higher than the survey found last year. The survey did not limit terrorism to either domestic or foreign acts.
But nearly all of those investors, 92 percent, also reported that their portfolios have increased in value during the past 12 months. Only one-fifth said the stock market appears to be riskier than it was a year ago, despite their concerns. One-third said the stock market is less risky than a year ago.
Investors, however, have not yet acted on rising financial confidence. Two-thirds of the survey's participants said they did not intend to make any changes to their portfolios. An average of 16 percent of the assets in those portfolios, the survey found, are in short-term, easily liquidated investments.
William J. Porter Jr., regional president and managing director of U.S. Trust, based in Garden City, said that percentage is extremely conservative. In the past, he said, a typical, moderately risky portfolio generally contained only 3 percent easily liquidated assets.
Porter said investors should begin to move their assets into stocks and other investments and take advantage of the rising market.
"But this is the first economic recovery where we could potentially see more terrorism on the homeland, on U.S. soil," Kamer said. "I think that's the difference between this recovery and other, past recoveries." |
