Equity investments on the rise for mass affluent

Wealthy investors plan to increase their equity holdings in 2013, with the biggest gains among the wealthiest investors, according to Spectrem Group’s new research report Wealth Management Series: Product Usage and Perceptions of Providers.

In the next 12 months, 71 percent of Ultra High Net Worth investors, with more than $5 million in net worth not including their primary residence plan to invest in equities, up from 52 percent in 2010. Equities are the top investment pick among the UHNW investors, with cash-based instruments coming in second, at 51 percent.

In comparison, 55 percent of millionaires (with $1 million to $5 million in net worth) intend to invest in equities, both individual stocks and stock mutual funds, in 2013 versus 45 percent in 2010, Spectrem Group found. Still, cash-based instruments will edge out stocks as the top 2013 holding among millionaire investors, at 56 percent.

Those with smaller nest eggs are increasing their stock holdings but more slowly. Only one in three mass affluent investors (with $100,000 to $1 million in net worth) will invest in equities this year, up from 2010’s 23 percent. Equities rank a distant second among 2013 investments for the mass affluent, with cash remaining king. Nearly twice as many mass affluent investors, or 60 percent, plan to put money in short-term instruments.

“Wealthy investors remain cautious because of the ongoing economic and political uncertainties. As a result, they are balancing their increased exposure to equities by retaining a sizable amount of cash,” said George H. Walper Jr., Spectrem Group president, in a release. “Their interest in all types of investments will increase substantially when the uncertainty in Washington around taxes and spending is resolved and unemployment levels are reduced.”

Additional wealthy investor insights are available on the Spectrem’s MillionaireCorner.com, including:

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