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Wealthy Americans Cautious About Investing and Economy - Survey

The recession has left a large number of America’s wealthy cautious about re-investing in the stock market and skeptical about a strong economic recovery, according to a survey by Philadelphia-based PNC Wealth Management, a member of The PNC Financial Services Group, Inc.
Only 41 per cent of ultra-wealthy Americans who have at least $5 million in investible assets are optimistic about the stock market’s prospects over the next six months, according to according to PNC’s sixth annual Wealth and Values Investors’ Outlook.
That number was slightly higher – 51 per cent - for wealthy Americans surveyed who have at least $500,000 in investible assets.
The ultra wealthy are also more pessimistic about economic recovery: 52 per cent do not expect to see economic improvements until well into 2010, compared to 40 per cent of all wealthy Americans surveyed.
And only 6 per cent of those surveyed characterize themselves as enthusiastic about investing, while 49 per cent describe themselves as either more tentative or outright reluctant to invest.
Only 20 per cent of those surveyed believe the economy is showing signs of improvement, and 40% said progress is at least one year away.
Wealthy individuals have also changed their investment behavior, according to the survey.
Over one third (34 per cent) say they are more conservative now, while 59 per cent describe themselves as balanced or “moderate risk” investors.
“There is no doubt that the last year has taken its toll on wealthy investors,” said Thomas Melcher, executive vice president and managing director of Hawthorn, the division of PNC Wealth Management that serves clients with $20 million or more in investible assets.
“Unfortunately it often takes a severe crisis and a significant loss of capital for investors to discover their true risk tolerance. The survey results validate the value of an integrated wealth management model – one that combines estate, financial and tax planning with investment management,” he said.
Harris Interactive conducted the survey of 1,046 wealthy US citizens in September.