Wealthier individuals may have gotten that way by taking bigger risks, or they are now willing to risk larger portions of their investments in an attempt to increase their fortunes even more, according to a new report from the Spectrem Group. According to the report, The $25 Million Plus Investor, a large proportion of people with a net worth of at least $25 million in investable assets describe themselves as willing to risk large portions or all of their investments. Individuals with a net worth of at least $5 million but less than $25 million describe themselves as much more conservative.
A full 33% of the $25 million-plus group describe themselves as "aggressive" in their investment strategy, meaning they are willing roll the dice with a significant portion of their investments; 8% categorize themselves as "most aggressive," meaning they are willing to expose all of their investments to risk.
In contrast, only 20% of lower-net-worth wealthy individuals, those with between $5 million and $25 million, say they are "aggressive" and willing to risk a large portion of their investments, while a mere 4% say they are willing to put all of their investments into risky ventures. At the same time, only 6% of the $25 million-plus group say they are "conservative" investors, compared with 9% of the $5 million-and-up group who categorize themselves that way."Even in the face of intense financial market turmoil, investors with the most to lose are willing to roll the dice with risky investments," says George H. Walper Jr., Spectrem Group president. "This raises eyebrows given that the $25 million households have about two-thirds of their wealth tied up in stocks, alternatives and other investable assets."