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CNBC Millionaire Survey: 62 Percent Say Trump Will Be Good for Investments

CNBC Millionaire Survey: 62 Percent Say Trump Will Be Good for Investments

(AP/Zhang Chunlei)

By    |   Monday, 19 December 2016 01:16 PM


America's wealthy are pumped about investing now that Donald Trump will take over the White House, CNBC’s Millionaire Survey found.

The results of CNBC's latest Millionaire Survey found that 43 percent of investors with more than $1 million in investible assets voted for Hillary Clinton, while 42 percent voted for Trump. That marked a huge swing from CNBC's spring survey, when Trump had only 31 percent of the vote. That means Trump captured nearly all the undecided millionaire voters.

CNBC's online survey polled 750 investors with $1 million or more in investible assets shortly after the election. Following the Trump win, nearly half of millionaires said the economy will be stronger in 2017. In the spring, only 30 percent said the economy would be stronger.

Sixty-two percent said Trump will be good for their investments, and most predict the S&P will be up by 5 to 10 percent next year. Nearly half said they expect their personal assets will increase next year, CNBC.com reported.

"One big reason for the group's investment and personal optimism is lower taxes. Of those worth $5 million or more, 43 percent expect a tax cut. And many plan to put that extra money into the market — 40 percent say they will invest their cuts in stocks, and one-third said they will put it into savings," CNBC reporteed.

Meanwhile, millionaires are pouring into financial and industrial stocks and pulling back on tech and health care, which were their favorite sectors in spring 2016, according to the survey, conducted shortly after the election in November.

Thirty-seven percent of millionaires told CNBC that the election results will cause them to make major changes to investment choices, while 40 percent of millionaires said any tax cut will lead to increased investment in stocks.

"A lot of cash sitting idle is now getting back in," said Tom Wynn, director of research at Spectrem Group, which conducts the Millionaire Survey for CNBC. "What they are saying in this survey is that they are investing everything politically. Nothing else is triggering their investments — not age or anything else."

Meanwhile, veteran financial guru Larry Kudlow, who served as the Trump campaign's senior economic adviser, is very optimistic that the stock market can continue its record bull run, but warns that there will be some rough patches ahead.

Kudlow told CNBC Trump has the potential to be “a very dynamic leader” by reviving economic growth with his tax-cut strategy, which in turn will restore Americans’ optimism.

Kudlow also is a leading candidate to chair the White House Council of Economic Advisers, The Wall Street Journal reported, citing people familiar with the transition.The appointment would put an establishment Republican who served in the Reagan administration in charge of shaping economic analysis in the Trump White House.

“I’m an optimist on stocks but there are going to be corrections,”said Kudlow, a Newsmax Finance Insider, radio talk-show host and CNBC senior contributor.

“There are going to be corrections. I don't want to be Pollyannic. There are going to be tough corrections,” said Kudlow — host of "The Larry Kudlow Show" and author of "JFK and the Reagan Revolution: A Secret History of American Prosperity," written with Brian Domitrovic and published by Portfolio.

The S&P 500 stock index has surged over 8 percent since the Nov. 8 election, due in large part to sectors that are expected to benefit from an inflationary policy, Reuters reported.

A correction is a reverse movement, usually negative, of at least 10% in a stock, bond, commodity or index to adjust for an overvaluation.

Big gains since last month's election mean stocks generally are more expensive relative to their earnings, a key gauge investors use to measure whether the market is overpriced, the Associated Press explained.

The S&P 500 is trading at about 19 times its earnings per share over the last 12 months, according to FactSet. That compares with its average price-earnings ratio of 15.6 over the last 15 years and is an indication that stocks are, if not expensive, no longer cheap. And that, in turn, implies lower future returns than the big gains investors have enjoyed since the Great Recession's end.

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America's wealthy are pumped about investing with Trump: CNBC Millionaire Survey
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Monday, 19 December 2016 01:16 PM
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