Wealthy continue to shy away from investing
Over two thirds of wealthy investors are still unwilling to pursue investment opportunities for fear of further price falls, even though 90% believe there are good opportunities around.
A report by Barclays Wealth and the Economist Intelligence Unit found 68% of high net worth individuals ignore clear signs of opportunities for good returns on investment.
The study, which polled 2,100 high net worth individuals across the globe, said one upside of the retreat to familiar and simple asset classes is the resurgence of investment in real estate.
Market uncertainty is driving investors towards inaction and asset familiarity, with 53% saying they would only invest in what they know.
Where people do plan on making adjustments, they are retreating to familiar and simple investments.
The most significant portion plan to increase their allocation to real estate (25%), with government bonds (22%) and commodities (21%) the next most popular asset classes.
Trends vary regionally, with investors in the UAE (31%) most likely to increase their allocation to real estate, followed by Hong Kong (30%), the USA and UK (both 24%). Western countries are showing a strong tendency towards cash and domestic stocks.
UK (28%) and US investors (23%) are most likely to increase their allocations to cash. US investors (30%) were overwhelmingly most likely to invest in domestic stocks, followed by UK investors (21%).
Rory Gilbert, head of UK & Ireland private bank at Barclays Wealth said: “Investment often involves striking a balance between financial and emotional considerations. The findings show that investors are currently constrained by a fear of regret and not only are they turning a blind eye to the opportunities they know are out there, but they are sticking with safe options.”
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