Eighty-six percent of affluent investors are optimistic about their investments and 74 percent believe that U.S. equities offer the greatest opportunities over the next 12 months, according to a recent Legg Mason survey.
Just 53 percent said they favor international equities.
The survey of 500 U.S. investors with at least $200,000 in assets found the majority would maintain their asset allocation over the next twelve months. The average asset allocation among respondents was 41 percent equities, 22 percent cash and 20 percent fixed income.
“There is a promising amount of optimism among U.S. investors and much of it is focusing on U.S. equities,” said Matthew Schiffman, managing director and head of global marketing at Legg Mason Global Asset Management. “This is consistent with our global research conclusions and bodes very well for the U.S. equity markets should investor optimism ring true.”
Income-generating products were a priority for 58 percent of investors, according to the survey. Compared to 2013, the gap has narrowed between investors desired rate of return and the actual rate received.
On average, respondents who used income-generating products said they seek a return of 8.3 percent, but they received an average of 6.4 percent. In 2013, the gap was wider, with investors expecting an 8.5 percent rate of return and receiving an average of 5.9 percent.
Low U.S. economic growth was the top issue that 44 percent of investors fear could disrupt the markets, followed by inflation (36 percent), low interest rates/yield (34 percent), reduced economic stimulus (32 percent) and increased tax burden (31percent), says Legg Mason.