This Day On The Street
Continue to site
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

Wealthy Are Optimistic, Like U.S. Stocks Right Now

NEW YORK (TheStreet) -- For the 88 million U.S. workers identified by the American Benefits Council as having a 401(k) plan, making investment choices isn't easy.

So why not turn to a demographic that has demonstrated it knows how to make money in the financial markets and see what they think about investing, money and the economy?

Legg Mason surveyed 500 affluent U.S. investors last week and found a generally sunny outlook, with 86% of respondents saying they are "optimistic" about their investment portfolios and 74% saying the stock market is the best place to build wealth over the next year.

Here's how the wealthy rank the top-performing financial markets right now: U.S. stocks (74%); international stocks (53%); real estate (53%); gold/metals (33%); U.S. bonds (31%); cash (28%); alternative investments (24%); and global bonds (19%).

Must Read: How to Take Care of a Pet Financially (Including If You Die)

For 401(k) investors, where the wealthy prioritize their investment savings is what really counts. Legg Mason reports the following asset allocation breakdown among affluent Americans: stocks (41%); cash (22%); fixed-income (20%); real estate (6%); alternatives (4%); and other (7%).

Both rankings show wealthy Americans growing bullish on stocks.

"There is a promising amount of optimism among U.S. investors, and much of it is focusing on U.S. equities," says Matthew Schiffman, a managing director at Legg Mason. "This is consistent with our global research conclusions and bodes very well for the U.S. equity markets should investor optimism ring true."

Surprisingly, cash remains a strong option, even as banks continue to offer paltry return rates on savings vehicles such as certificates of deposit and money market accounts.

For example, reported an average rate of return on one-year CDs at a weak 0.196%. Money market returns are worse, at 0.095%.

There are several additional areas of concern for the affluent investment class.

Weak economic growth was cited by 44% of survey respondents as a huge threat to prosperity, while 36% cite inflation and 34% say low interest rates on bank savings vehicles are a challenge. An "increased tax burden" was cited by 31% of survey participants.

For 401(k) investors looking for clues from the financial market, the Legg Mason study reveals some insight on how the wealthy view the markets and investing.

Of course, the rich likely have a wider margin of error than mainstream Americans, but knowing where their money is going is still a useful road map for the middle class.</p.

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.66 -0.09%
FB $118.57 0.84%
GOOG $698.30 0.76%
TSLA $241.82 0.44%
YHOO $36.53 -0.19%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs