Millionaires saw the most gains to their investments last year and are more willing to invest in real estate than other investors, according to a new survey from Morgan Stanley Wealth Management.
The poll, titled Investor Pulse, surveyed 1,000 U.S. investors with between ages 25 and 75 between January and March. All of the respondents had
Of the respondents, 68% of the millionaires surveyed said they saw their portfolios improve in 2012 versus 45% of the other respondents. Millionaires were also more likely to eye putting their money in real estate, with 54% indicating it was a good investment versus 44% of the other investors surveyed. And, 52% of the millionaire investors surveyed said that now is a good time to buy a second home.
Millionaire investors’ top concerns include persistent low interest rates for fixed income investments, with 82% citing it as a concern versus 72% of the poll’s total respondents; estate tax increases, with 48% of millionaires citing it as a worry compared to 39% of all respondents; and the affordability of health care, with 68% of millionaires citing it as a concern versus 77% of all investors surveyed.
“There’s still a fair amount of caution on the housing market” in spite of national evidence of a broader recovery, said
Mixed Bag When It Comes To Investments
The millionaires’ warm reception to real estate comes as investors across the U.S. are still seeing a tepid recovery, with 38% indicating that prices in their area are flat and 20% seeing a price decrease.
There were signs that a recovery is in progress, with 56% indicating there are no foreclosure issues in their area, and four in 10 of the investors surveyed indicating they have seen prices rise in their markets. Of all of the respondents, 74% said it is a good time to buy a primary residence.
Capital preservation came in as a top priority for all of the investors surveyed, with 55% indicating that holding onto their investments is more important than it was three years ago and 41% indicating it is just as important.
When it comes to types of investments, equities comprised the largest share of the investors’ portfolios at 41%, compared to 22% for cash, 20% for fixed income and 17% for other areas including alternatives and commodities.
Going forward this year, the investors surveyed indicated that they are positively eyeing investments including gold, with 48%; followed by dividend-bearing stocks, 46%; S&P 500 index funds, 45% and mutual funds at ETFs, 41%. At the bottom of the list, just 26% of the investors cited Treasuries as a favorable investment, and only 22% indicating they see municipal bonds in their home states as positive. The investors surveyed were also wary of international stocks and mutual funds, with 26% indicating it was a bad investment and 46% indicating they are neutral towards those investment prospects.
The survey also highlighted the opportunity for financial advisors that has cropped up since the financial crisis, with 78% of the investors surveyed indicating they work with at least one advisor. And those investors seeking the advice of a professional are more likely to be women, with 83% of women seeking help versus 73% of men.
Of the areas investors are most interested in having addressed, 87% said they are interested in finding out how their assets can contribute to retirement income; 86% indicated they want direction on asset allocation and analysis of how the economy affects their portfolio’s performance; 85% said they want to know more about new federal tax rules; 82% want more portfolio protection and new investment ideas and 75% want help sticking to a financial plan.
“The experience of the last 10 years has convinced people with substantial assets that they don’t want to go it alone, that they benefit from getting help from a third party,” Wiggins said. “They’ve convinced people that the financial markets are unpredictable and treacherous places, and they benefit from getting help and advice.”
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