Wealthy Ready For Increased Risk

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    The world’s wealthy intend to take on more risk this year as they try to regain money lost during the global financial crisis, says the ‘Family Performance Tracking Survey’ by the Institute for Private Investors, an educations and networking service for ultra-high net worth individuals. The survey shows 63 per cent of respondents plan to increase their allocation to global equities in 2013 and 53 per cent plan to increase their positions in domestic equities. Fifty-one per cent of respondents said growth was their primary objective in 2013, compared to 47 per cent in 2012. Income also grew in importance up to 13 per cent from 10 per cent last year. In contrast, those that listed wealth protection as their primary objective were down to 36 per cent from 43 per cent in 2012. IPI president Mindy Rosenthal says this “shows that the emotional climate of ultra-affluent investors is marked by a feeling that the time is right to get off the sidelines and start focusing on rebuilding wealth lost in the Great Recession. Private investors are still highly concerned about preserving capital, but they realize to preserve wealth they need to generate returns.” In terms of asset allocations, 42 per cent of respondents plan to decrease cash in 2013, 37 per cent plan to decrease municipal bonds, and 44 per cent plan to decrease taxable bonds. In contrast, 40 per cent plan to increase allocations to private equity. The survey also found asset allocations were being fine-tuned according to performance history or future assumptions, as opposed to changes in risk tolerance.