Forget $1 Million. To Feel Wealthy, You Need $5 Million in Assets

“Investors are using significant cash holdings as a type of ‘security blanket’ to give themselves peace of mind, but also to allow them to feel comfortable getting out there and participating in the market again,” Emily Pachuta, head of investor insights at UBS Wealth Management Americas, said in a statement.

“This has translated to a greater confidence—and faith—in the economy over the long term despite investors’ expectations of continued market volatility in the near term.”

Eighty-five percent of respondents said they felt more confident when their financial plan was dedicated to long-term healthcare expenses and to providing financial support across multiple generations. Confidence dropped to 57% with a more traditional financial plan.

Investor Watch found that 80% of investors thought about their assets as different buckets, with varying risk/return profiles, based on their expected use, such as savings, necessary purchases and recreational spending. 

Respondents viewed the Fed’s ending stimulus as positive for the long term, albeit with a short-term negative effect. Fifty-nine percent said they were not changing their investment strategy as a result of the Fed’s announcement.

Other key findings include:

• 67% of investors said they believed the economy was strengthening, and 60% said their long-term economic outlook was bright;
• 56% found the idea of a 5% constant return highly appealing for the next 12 months, while 40% found this highly appealing for the next 10 years, indicating long-term return expectations remain higher than 5%;
• 33% were highly prepared for long-term care planning, while 36% were not prepared.