Wealthy Americans eyeing stocks this year

Feb 22, 2011 @ 4:58 pm

By Liz Skinner

Stocks are back in favor with America's wealthy investors.

About 52% of ultrahigh-net-worth households said they are likely to buy stocks or stock mutual funds this year, according to a survey by Spectrem Group.

After equities, cash is the most popular investment choice of wealthy households, with 35% likely to invest in cash instruments, 33% planning to invest in international investments, and 31% expecting to invest in fixed-income products in 2011, the survey found.

About 92% of these households already own individual stocks and their average investment in individual stocks is $1.4 million.

These households had an average cash balance of $659,000 at the end of 2010, representing 10% of their total investible assets, the survey said. Their cash balance includes money market funds, checking, savings, Treasury bills and certificates of deposit.

“Investors in general are starting to get into the equities market and this ultrahigh-net worth group is even more so,” said Tom Wynn, the Spectrem Group director who wrote the report. “By next year, I think you'll see that cash number go down, particularly if we see the markets improve.”

Wealthy investors' interest in mutual funds also is on the rise, with 82% owning U.S. stock mutual funds last year, compared to 65% in 2009, the survey found.

The report is based on a survey of 516 households with a net worth of $5 million to $25 million, not including their primary home. It was conducted in November and has a margin of error of 4.3%.

The ultrawealthy like to be involved in day-to-day management of their accounts and they enjoy investing, the survey found.

About 90% consult with an adviser on some aspect of financial planning, but all of these millionaires control some assets on their own, the survey said.


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