Affluent Investors Prefer Stocks, Real Estate -Citigroup Survey
Affluent investors believe current market conditions are better than a year ago and think it is a good time to put money into stocks and real estate, according to a poll conducted by Citigroup's Smith Barney unit.
"In an environment of continued optimism about their portfolios, many affluent investors feel that now is a good time to put money in stocks, and that real estate is still a good investment for the long term." said Craig Pfeiffer, executive vice president of Smith Barney.
At the same time, the number who feel it is a good time to put their money into bonds or other fixed investments has dropped by seven points over the past month.
The poll, which was conducted between Jan. 10 and Jan. 28, canvassed investors with at least $100,000 in financial assets, excluding real estate assets and employer retirement plans. Investors with more than $1 million in assets represented 44% of the interviewees.
Half of those in the $100,000 to $1 million bracket said they expected investment conditions are better today than they were a year ago. Only a mere 14% of that segment feared that the investment environment has gotten worse.
However, the $1 million-plus segment was even more optimistic. More than half, about 57%, of this upper-crust described the investment climate as better than it was last year.
Three-quarters of those polled expect their portfolio will meet or exceed their expectations over the next year.
A combination of factors is fueling this optimism. Fewer investors expect interest rates to rise over the next year. Thirty eight percent of those surveyed expect interest rates rising in the near term -- a smaller number than any 2006 poll saw.
Also, energy is less of a worry. Some 66% of the investors believe that energy prices will rise over the year. That's about 10 points lower than last month.
Perhaps more importantly, fewer respondents expect energy prices to hurt the investment climate at all.
Although investors widely believe the housing market is an important part of the overall economy, eight out of ten surveyed feel the housing sector is weaker today than it was a year ago. Moreover, many - about 28% - expect the housing market will remain weak or become even weaker over the next 12 months.
Still, 40% of the total respondants and 52% of millionaires consider real estate to be a good investment. Nine out of ten own some type of real estate investment and about 52% report that the value of their real estate investments has increased over the past year. Two out of three indicate that their real estate investments have performed at least as well as their other investments.
Greenwald & Associates and Synovate conducted the Citigroup Smith Barney Working Wealth Poll online with 575 investors who are members of the Synovate Consumer Opinion Panel.