In a seeming contradiction, a large group of ultra-high-net-worth individuals (23%) do not view their primary residence as a stable investment, while an even larger group (45%) thinks it is a good time to invest in real estate, according to a new study by Spectrem Group.
Both attitudes are more prevalent among those under 45 than older investors. In the younger group, 61% feel it is a good time to invest in real estate, while 37% do not view their primary residence as a stable financial asset, according to the study.
The study, Spectrem Group Voice of the Investor: Investment Attitudes & Behaviors, looked at 482 individuals with between $5 million and $25 million in investable assets, not counting their primary residence. Among the ultra-high-net-worth, 70% fear an increase in taxes, but only 40% say they will change investment strategies, possibly because they have already made adjustments, Spectrem said.
The political environment concerns more people now (80% compared to 73% a year ago) as does the potential for a prolonged economic downturn (77% this year compared to 69% last year). But a large group (40%) feels their financial situation will improve after the general election.
The percentage of people who let their financial advisors make their investing decisions declined substantially from last year, dropping to 16% from 23%. However, those who ask for assistance on a regular basis increased (28% now compared to 23% a year ago) and those who want help when specific events occur went up from 27% to 29%.
The percentage of people reporting they enjoy investing went up 6% to 60% this year and the percentage who want to be actively involved in day-to-day activities increased by 8% to 58%, the report said.
Because high-net-worth individuals enjoy investing, "advisors must provide well-informed, holistic investment strategies to discuss with these active investors," said Spectrem.
-Karen DeMasters