Affluent Investors Divided on How Trump Will Affect Their Portfolios, Personal Capital and ORC Report Finds
SILICON VALLEY, Calif.,
According to
Compounding this uncertainty are sharp gender and generational divides among investors on how the political environment will affect their finances. Men are 13 percentage points more likely than women to believe
"The thrill of the market's recent performance can blunt reality – periodic market downturns are inevitable. It's not a question of if, but when, so it's critical to be prepared," says
Indeed, the report found that many affluent investors may not be diversified enough. 16% of affluent investors - and 25% of millennial investors specifically - hold most of their net worth in cash. This has the potential to generate negative net real returns on an ongoing basis, without the opportunity to participate in the upside of a recovery. In contrast, affluent
"When taking inflation into account, holding too much cash is like manufacturing your own market downturn," adds Brownstein. "Many investors incorrectly believe they are automatically diversified if they hold index ETFs and mutual funds, and as a result their portfolio is in danger."
Additional findings from the report include:
Affluent investors see the market, and their own income, growing in 2018
- Nearly half (48%) of respondents believe the stock market will perform better in 2018 than it has in 2017. Nearly three in five (59%) respondents expect their gross income to increase in 2018.
- With growing income expectations, affluent investors are also giving to charity – nearly all (97%) respondents have already given to charity in 2017 or plan to give before the end of the year.
- Forty-seven percent of millennials say they have given or will give
$20,000 or more in 2017, versus 22% of Gen X, 4% of Baby Boomers, and 4% of the Silent Generation.
However, affluent investors are still deeply concerned about their financial well-being – and with good reason
- Affluent investors' most prevalent concerns are financial security in retirement (51%), that they have not properly tax-optimized their portfolio (46%) and that their portfolio can't withstand a market downturn (42%).
- 60% of affluent investors—including 87% of Millennials—admitted to making financial mistakes in 2017, such as not saving enough, paying too much for luxury items, and paying too much in investment fees.
Despite the uncertainty, affluent investors are proactively setting their top financial goals for 2018
- 24% plan to tax-optimize their investment strategy
- 19% set a goal of "getting ready for retirement"
- 15% set a goal of "getting a handle on financial life"
To download the full report, which includes age, gender and regional differences throughout the
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