High income investors are cautiously investing in short-term products, most often going into equities, a Spectrem study showed.
A Spectrem study of wealthy investors based on income indicated that 56 percent of investors plan to put money into savings accounts over the next 12 months. Forty-five percent said they would invest in equities, and 33 percent said they would invest in money market funds.
Among investors at the highest income level in the study, $750,000 or more annually, 70 percent said they were going to put money into saving accounts, 57 percent said they would invest in equities, 48 percent said they were going with money market funds.
Fixed income investments such as individual bonds or bond mutual funds were targeted by 25 percent of investors and 26 percent said they were looking at international investments of any type, including stocks and mutual funds.
Real estate was down the list for most investors, with only 14 percent saying they would invest in real estate over the next 12 months. But 47 percent of investors with a net income between $500,000 and $750,000 said they would look at real estate, and 32 percent of the wealthiest segment said real estate was a possible buy.
Hedge funds and private equity firms were of interest to only 11 percent of investors, but that number rises among the investors with higher income. As much as 21 percent of investors at the highest income level said they would invest in hedge funds and private equity firms.
Asked to list the factors that determine their investment strategies, most investors agreed that all aspects of investment have to be considered. Eighty-eight percent said level of risk involved in each investment, 82 percent said the need to diversify a portfolio, 78 percent said the reputation of the companies where investments are made, and 72 percent said the tax implications of investments were factors in determining where investment funds go.
Only 34 percent said the social responsibility of investments was a factor.