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High Net Worth Investors Bullish On Prospects For 2014

88% Have Favorable Outlook For Financial Wellbeing, Despite Ongoing Economic And Geopolitical Concerns; Morgan Stanley Investor Pulse Poll Surveys Investor Segment Accounting For 94% of Household Financial Assets

Jan 29 2014 | New York

 
High net worth investors expect to climb a wall of worry in 2014.  Despite significant concerns over the U.S. economy, budget deficit and geopolitical tension, investors are expecting a good year in 2014 by large majorities:
  • 88% expect their financial wellbeing to be better or the same as in 2013.
  • 84% expect their investment portfolios to be the better or the same.
  • 70% see a better/same investment climate.
These and other findings are contained in the Morgan Stanley Investor Pulse Poll 1, a survey conducted during the fourth quarter of 2013 of high net worth investors, a third of whom represent U.S. households with investible assets of $1 million or more.  The overall sample provides a highly detailed look at the attitudes of a demographic that accounts for 94% of total household investible assets by value 2.
    
“The experience of 2013 has not been lost on investors,” said Gregory J. Fleming, President, Morgan Stanley Wealth Management and Morgan Stanley Investment Management.  “Despite a great deal of economic uncertainty, equity markets performed strongly as expectations accelerated for economic growth, and investors are looking for more of the same in 2014.   Equities remain the favored asset class, technology is viewed as the best sector in 2014, and the U.S. the best place to invest.”

Direction of U.S. Economy and Federal Budget Deficit Top Concerns
Despite their overall bullishness, economic concerns linger.  Fully 90% of investors are very or somewhat concerned about prospects for the U.S. economy, 87% about the government budget deficit, 82% about increased foreign conflicts, 81% about the U.S. trade deficit, and 75% on the effects of terrorism on the nation.

Unemployment is not a great concern for 2014.  Only 48% of investors say they are very or somewhat worried about stability of their employment.  Similarly, only 28% worry about being a financial burden on their children, or having their children be a financial burden on them (27%).

Equities Lead Expected Asset Allocation

Investors expect to end 2014 with the largest portion of their portfolio, 42%, dedicated to equities (including stocks, mutual funds and ETFs).  Cash will be the next highest allocation at 23%, followed by fixed income at 23%, followed by all other investments (13%).  Millionaire investors say they will commit an even higher allocation, 50%, to equities.  Dividend bearing stocks and various index funds (S&P 500, Dow Jones Industrial Average) are favored as good investment prospects by the highest percentages of investors.  Perhaps reflecting some continuing caution, gold is seen as a “good” (42%) or “neutral” investment (34%) by three-quarters of investors.

Technology Seen as Top Sector

Technology is seen as the top investment sector by high net worth investors, with 72% seeing it as a good place to put their money in 2014.  Bio-tech follows at 67%, followed by energy (66%), pharmaceuticals (61%) and communications (54%).  Millionaires are relatively more bullish than lower net worth investors on financial services, healthcare, industrial and the consumer discretionary sectors.


U.S. Viewed as Top Place to Invest
U.S. Investors plan to stay focused at home this year, with 52% favoring the U.S. as a place to invest.  This is followed by China (41%), India (39%), Japan (38%) and Brazil (34%).  
The Middle East and Russia have the highest negatives as places to invest, with “bad” ratings of 67% and 54%, respectively.

Morgan Stanley Wealth Management, a global leader, provides access to a wide range of products and services to individuals, businesses and institutions, including brokerage and investment advisory services, financial and wealth planning, credit and lending, cash management, annuities and insurance, retirement and trust services.  

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services.  The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 1,200 offices in 43 countries.  For further information about Morgan Stanley, please visit www.morganstanley.com.

For a complete copy of the poll go to www.morganstanley.com.

1 Survey Methodology: 1,004 U.S. investors, age 25 to 75, with $100,000 or more in investable household financial assets.  A third of those interviewed had $1 million or more in household financial assets.  Poll conducted by GfK Public Affairs October to December, 2013.

2 Source: A statistical analysis of the Survey of Consumer Finances Data. October 2010, a CEB data analysis of the Federal Reserve Board’s 2010 Survey of Consumer Finances.

CRC 798583

Media Relations Contact: James Wiggins, 914.225.6161



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