The 1,012 investors who participated in the survey are experienced investors, 59 years old, on average, with an average $3.5 million of investable assets, not including real estate, and $300,000 in annual household income. They have been “fundamentally optimistic in all three years” that the survey’s been conducted, and they’re “resilient” in their attitude about the future, said Fidelity Investments Executive Vice President Gail Graham, in an interview with Wealth Manager in Orlando, Florida. These investors, surveyed in February, don’t panic, but instead take a step back, reassess. It’s not that they feel immune, however. Their attitude is: “Look at your spending patterns and cut back,” Graham adds. Three-quarters of these investors are self-made, she explains. They stay focused and look for opportunity.
Of the surveyed group, 75% of them work with an advisor–and were “quite satisfied with their advisors,” says Ekaterina Walsh, PhD and vice president of market research for Fidelity Investments Institutional Wealth Services. And, of all of the types of advisors these investors work with, wealth managers providing a comprehensive look at their whole financial picture get the highest ranking. But while there’s been “little defection” from current advisors, these investors are adding advisors–a move toward diversification in advice and maybe location of assets.
These investors are a “great teaching source for the rest of our investors,” Graham notes. They “know that they need to be in the stock market.” And they’re ready for the right opportunity: “There’s enormous cash on the sidelines,” she says. “These clients will move–[they are] getting psychologically ready to do it.”
According to the survey, 44% of participants said they would be “confident” getting into equities with the DJIA between 8,000 and 11,000, another 39% are “confident” of the opportunity presented by investing when the DJIA is between 7,000 and 7,999, and some have been waiting for a 7,000 DJIA.
They are most concerned with taxes and want to take advantage of opportunities to invest in tax-smart ways, Graham explains. They are also looking closely at adding more fixed-income investments. Their responses indicated an attitude that “people should live within their means,” she says. We “won’t see a lot of heady, high living by this crowd.” They are most concerned with making their money last and they consider the risks of inflation, longevity, the cost of healthcare and taxes when considering how to structure their portfolio. In terms of fixed-income investing, Fidelity’s Capital Markets desk is seeing “much higher” activity in fixed income, Graham adds–some short-term because of the low interest rate environment.
While they spend, on average, three hours a week monitoring their investments, 46% of the participants “don’t feel wealthy” at $1 million plus in investable assets and an average of $3.5 million in the group participating in the survey. So what level of investable assets would it take for them to feel wealthy? Walsh says participants said that it would take $7.5 million of investable assets, on average, for them to actually feel wealthy.
The last word
These investors don’t want to “let a serious crisis go to waste,” according to Walsh. They are looking for opportunity in real estate and other investments that are now priced at more attractive levels than before. One participant advised peers to: “Put on your big-boy pants and stop whining.”