Spectrem’s Affluent Market Insights report shows that the Mass Affluent investor, with a net worth between $100,000 and $1 million, greatly lowered its stock market investment after the recession of 2008 and has not come back even though Wall Street has had a strong showing.
There has been noteworthy change in the investment risk of investors from 2005 to 2013. With Mass Affluent investors, there has been an increase in aggressiveness, from 14 percent who were either “most aggressive’’ or “aggressive’ in 2005 to 20 percent in those two categories in 2013.
The change has been even more significant among UHNW investors. In 2005, there were just 16 percent of investors who considered themselves in the two aggressive categories and in 2013 the number doubled to 32 percent.
There were similar changes among Millionaire investors with a net worth between $1 million and $5 million. In 2005, only 14 percent considered themselves any level of aggressive, and in 2013 29 percent said they were either “most aggressive’ or “aggressive’’.
In 2005, one out of 5 of Mass Affluent assets were in the stock market, while 15 percent were in mutual funds and 13 percent were in checking accounts and money market funds. By 2013, the Mass Affluent had lowered its asset total in stocks and bonds to just above 10 percent (11 percent), with twenty percent in deposit products and 10 percent in mutual funds.
UHNW investors, with a net worth between $5 million and $25 million, either never left the stock market or left for only a short time before returning. The UHNW investors had just above 20 percent of assets in the stock market in 2005 and barely dropped to 19 percent by 2013. They kept their level of investment in mutual funds to 12 percent and dropped marginally in deposit products to 11 percent.
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