Majority of high net worth investors still bullish on U.S. stocks

Fidelity Investments polled customers with at least $250,000 in investable assets on a range of income generation questions. It found that those investors are actively looking for dividend-producing stocks and corporate bonds for higher yields in a low interest rate environment.

The poll was taken during the live Fidelity Viewpoints Forum: Investing for Income in Boston on June 13, where five Fidelity portfolio managers discussed the Eurozone implications in the U.S. economy, opportunities in emerging markets and that they believe many U.S. corporations are currently a quality investment in stocks and bonds.

Forty-four percent of investors polled said they would put their next investing dollars in U.S. stocks, 16 percent would put it in investment-grade corporate bonds, 9 percent chose high-yield bonds and 9 percent chose “under the mattress.”

More than half of those surveyed said they were bullish on dividend-producing stocks, followed by investment-grade corporate bonds (15 percent).

When asked about their most pressing financial worry, 28 percent said the crisis in the Eurozone, 27 percent said that U.S. debt problems were the major issue and 24 percent said high unemployment and the recession.

Even though fixed-income investments returned about 7 percent in the past year, only 18 percent of high net worth investors think they can achieve or beat those same results over the next 12 months. Nearly one-third, or 32 percent, think their fixed income returns will drop below 4 percent and another third expect between 4 and 6 percent.

A whopping 86 percent of high net worth investors believe taxes will be higher next year, both on income and on investment income like capital gains and dividends. When asked what tax strategy they plan to use, more than half said they will do nothing differently.

“This group of high-net-worth investors are realists about this low-interest rate environment, but are not resigned to accepting low returns,” said John Sweeney, executive vice president of Fidelity Planning and Advisory Services. “They’re willing to look to alternative products to find yield, but we encourage them not to stretch too far and lose sight of their underlying investment strategy and encounter unnecessary risk.”

More than 1,000 individuals responded to the poll.


Advertisement. Closing in 15 seconds.