BOSTON (TheStreet) — Rich Americans are more pessimistic about the economic rebound than most economists are, and many don't think the government can help.
And about half of wealthy investors in the U.S. predict the domestic and global economies will deteriorate over the next few years, or at least during the next year. Only 34% say the U.S. economy is stable, and 60% say the downturn has reduced their trust in the government.
Americans have a reason to be dour. Private payrolls rose by 41,000 last month, the Labor Department said Friday. Economists had expected 180,000. And the unemployment rate dropped as 322,000 Americans left the labor market out of discouragement over hiring prospects.
(BCS) In the Barclays survey, two-thirds said the U.S. government didn't react to the economic rout effectively, and that rising taxes and a ballooning deficit will deter the recovery.
For the wealthy, lowering exposure to "high-risk" investments and an increased focus on wealth preservation have emerged as priorities. Still, many are sticking with equities and real estate. The survey, however, was conducted before the Dow dropped to below 10,000 points last week, finishing at the lowest point since early February. "Against a turbulent backdrop, investors continue to favor investing in what they know," the report concludes. "The tangibility of property and the simplicity of equity investments are both attractive propositions for investors in an uncertain global economy."
(BCS) Survey participants in Ireland and Spain reported the biggest drop in wealth. Among U.S. respondents, only 34% said their net wealth was "quite negatively" or "very negatively" hurt by the recession, less than the 38% global average.