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High-Net-Worth Investors Worried About Direction Of U.S. Economy

Two thirds of high-net-worth American households with five million or more in investable assets believe the country is worse off now than it was in 2007, according to survey findings by Northern Trust.

Respondents cite the rising deficit, ballooning national debt and stubborn unemployment rate as the main reasons they’re worried about the nation’s five-year outlook. Among high net worth investors, 29 percent attribute their negative outlook to the Obama Administration, but roughly the same number pointed to the President’s re-election as a reason for their positive outlook on the future.

Although most respondents believe the country is worse off, wealthy business owners showed a more positive outlook. Eighty percent said they planned to recruit more workers or would keep staffing levels stable in the next 18 to 24 months; 22 percent anticipate making capital investments in upgrading computers and other information technology within the same time period.

“The survey results mirror our clients’ divergent views around U.S. fiscal policy,” said Katie Nixon, Northern Trust’s Chief Investment Officer for Wealth Management. "In Northern Trust’s view, slow economic growth in the U.S. combined with an accommodative monetary policy, lends support to investing in risk assets such as equities."

Achieving Financial Goals

When describing the state of their own finances, close to three-quarters of high-net-worth individuals expressed confidence that they will achieve their financial goals, with only one in five less confident now than they were in 2007. Forty-one percent sited improved investment returns as the main reason they feel better off today. High-net-worth investors were split on their primary investment objectives, with 37 percent leaning towards growing wealth and 23 percent focused on generating income. The remainder said their paramount concern was capital preservation.

Just one quarter said they’re in a worse financial position now than in 2007. Negative sentiment was slightly stronger among men, with 25 percent versus 20 percent of women saying their household family finances had worsened. High-net-worth men were also less optimistic about the broader economy: 70 percent believe the country is worse off today compared to five years ago, compared to 56 percent of women.

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