WASHINGTON: Rich people are raising the stakes. The wealthy are now keeping more of their money in stocks than any other asset class, according to a new report out on Wednesday that offers a glimpse into the investing habits and concerns of the ultra-rich.
Stocks beat out cash last year to take the number one slot, according to the annual World Wealth Report by Capgemini and RBC Wealth Management, which looks at people with $1 million or more to invest.
The share of assets held in stocks increased to 27 per cent last year from 26pc in 2013. Meanwhile, the portion held in cash, which investors said they viewed as important to maintaining their lifestyles, dropped to 26pc from 28pc over that same time period.
The shift into equities offers a few lessons about how the rich are managing their money. It’s worth noting that some of that increase might just be a sign that the wealthy enjoyed some of the gains we saw in the stock market last year. The S&P 500 stock index gained 11pc last year, and anyone invested in the market would have seen their assets grow and take up a bigger portion of their portfolio.
It is also a sign that after witnessing roughly six years of gains, investors finally may be getting more comfortable with the idea of investing in stocks. There’s no telling how much higher the market could go, though. While stocks are still climbing — and have nearly tripled from the low in 2009 — movement in the market has been a little more flat in recent months.
Some more good news tucked into the report: More people are getting rich. The number of people with at least $1m grew by close to 1m last year to 14.6m people, the study found. (That included 920,000 new millionaires, to be exact) A third of those new millionaires live in the US.
By arrangement with Washington Post-Bloomberg News
Published in Dawn, June 20th, 2015
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