This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

High Net Worth Investors Stash Cash while Looking for Openings

By Hal M. Bundrick

NEW YORK ( MainStreet)--Not only is cash king, its reign is vast. An overwhelming 88% of one firm's investors are holding an average of 20% of their portfolio in cash. But apparently these investors will be looking to put some of this liquidity to work, as the survey of Fidelity Investments customers with at least $250,000 in investable assets also found that high-net-worth individuals are optimistic about the market. 81% believe the Dow Jones Industrial Average will be up at the end of 2013.

"Investors feel optimistic that the economic recovery in the U.S. is under way, yet the memory of the market downturn is causing that optimism to be tempered," said John Sweeney, a Fidelity executive vice president. "As investors feel more certain about job growth, encounter strong corporate earnings and better understand fiscal policy changes, they will invest in the market with more confidence. That confidence leads to better decision making and enables investors to withstand volatility in the market."
[Read: <a target="blank" data-add-tracking="true" href="http://www.mainstreet.com/article/moneyinvesting/bonds/muni-market-face-aftermath-detroit-bankruptcy"><em>Muni Market Faces Aftermath of Detroit Bankruptcy</em></a>]

The survey found that more than three-quarters (77%) of high-net-worth investors expect to match or beat market performance this year. About half (48%) say the stock market is fairly valued while 17% feel it is undervalued. And more than three-quarters (77%) believe the bedrock of the economy, the housing market, will have a positive impact on the financial recovery through the end of 2013.
[Read: <a target="blank" data-add-tracking="true" href="http://www.mainstreet.com/article/family/marriage/divorce/wedding-bells-how-brides-and-grooms-can-set-cellphone-etiquette"><em>Wedding Bells: How Brides and Grooms Can Set Cellphone Etiquette</em></a>]

Amidst all of this optimism though, there is a hint of anxiety. 70% of those same high-net-worth investors worry the Federal Reserve's end of quantitative easing could mark an end to market momentum and eventually send stocks lower.

Taxes are on the mind of some of these affluent investors, too. Nearly one-third (32%) of those surveyed have made modifications to their investment strategy as a result of income tax increases, and 21% plan to make some modifications. However, 41% won't modify their portfolios due to tax changes.
[Read: <a target="blank" data-add-tracking="true" href="http://www.mainstreet.com/article/career/students/gen-y/why-your-kids-wont-own-bigger-house-you"><em>Why Your Kids Won't Own a Bigger House Than You</em></a>]

Over half (53%) of high-net-worth investors are concerned about market volatility, while 32% are working to outpace inflation.

--Written by Hal M. Bundrick

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $126.44 0.00%
FB $87.28 0.00%
GOOG $523.40 0.00%
TSLA $280.02 0.00%
YHOO $39.38 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs