Eighty-six percent of affluent U.S. investors were optimistic about investments, according to a Legg Mason survey published this week.
Seventy-four percent of investors thought that U.S. equities offered the best opportunities in 2014.
Respondents were less enthusiastic about international equities, favored by 53% of those surveyed, followed by real estate (38%), gold or other precious metals (33%), U.S. bonds (31%), cash (28%), nontraditional investments (24%) and international bonds (19%).
These were the average asset allocation among affluent investors in the survey:
- 41% equities
- 22% cash or cash equivalents
- 20% fixed income
- 6% investment real estate
- 4% non-traditional investments
- 7% other
Although the majority of investors said they would maintain their asset allocation over the next 12 months, 25% said they would increase their allocation to equities and another 25% said they would increase their allocation to cash.
“There is a promising amount of optimism among U.S. investors, and much of it is focusing on U.S. equities,” Matthew Schiffman, managing director and head of global marketing at Legg Mason Global Asset Management, said in a statement.
“This is consistent with our global research conclusions, and bodes very well for the U.S. equity markets should investor optimism ring true.”
Northstar Research Partners conducted an online survey for Legg Mason in December and January of 4,320 investors with a minimum of $200,000 in assets in 20 countries, including 500 respondents in the U.S.
The survey found women in the U.S. to be more conservative than men in their asset allocations.
Women allocated 38% to equities, versus 43% for men; 24% to cash or cash equivalent, versus 20% for men; and 22% to fixed income, versus men’s 20%.
Legg Mason noted that the equity allocation among investors 65 to 75 years old was greater than that of investors aged 55 to 64, and not far from the equity allocation of investors aged 40 to 54 years of age.
Sources of Anxiety and Opportunity
Forty-four percent of investors in the survey feared that low U.S. economic growth could derail investment markets.