Tags: cnbc | millionaires | pessimistic | stocks | 2018

CNBC Poll: Millionaires 'Cautiously Pessimistic' About Stocks in 2018


By    |   Wednesday, 20 December 2017 03:59 PM

More than a third of millionaires polled in CNBC's Millionaire Survey say the stock market will be flat to down next year.

Millionaires are “cautiously pessimistic” due to the recent run-up in stocks, with more than a third saying the market will be flat to down next year, CNBC explained.

The forecast is the most bearish since the survey began in 2014.

Meanwhile, 41 percent of the millionaires say stocks will be up between 5 and 10 percent.

"They are cautiously pessimistic," said George Walper, president of Spectrem Group, the wealth-research firm that conducts the Millionaire Survey with CNBC. "They think it would be great if the market went up from here or even stayed flat. But it's been a big run-up this year and they're just not sure it's realistic."

Millionaire attitudes toward stocks are important since the top 10 percent of Americans — essentially the millionaires — own about 85 percent of stocks, CNBC reported.

Meanwhile, the number of millionaires in the world rose by nearly 8 percent last year to an all-time high of around 16.5 million people, with record total wealth of $63.5 trillion, according to a recent report by global consultancy firm Capgemini.

The wealth of high net worth individuals (HNWI) -- which Capgemini defines as those with investable assets of $1 million or more, excluding the primary residence, collectibles and consumables -- rose 8.2 percent on the year in 2016 and is on track to surpass $100 trillion by 2025, Reuters reported.

Some 1.15 million people became millionaires last year, the report said.

Surveys on the millionaires’ financial asset holdings show they held 31.1 percent in equities in the second quarter of 2017, compared with 24.8 percent in 2016.

Fixed income held steady at 18 percent, while cash grew to 27.3 percent from 23.5 percent.

Alternative investments, such as hedge funds, derivatives, foreign currency, commodities and private equity, fell to 9.7 percent from 15.7 percent.

The report did not dive into the reasons for the reallocation, but stronger global growth, coupled with hefty liquidity after years of unprecedented stimulus by global central banks, have pushed stock markets around the world to record highs.

Millionaires saw a 24.3 percent return on average on investment portfolios overseen by wealth managers.

As for 2018 market predictions, one respected economic voice has urged investor caution. 

Record high world stocks could have a “bumpy” ride in 2018 as the U.S. Federal Reserve is “walking on thin ice” in pushing interest rates up any further, the chief investment officer of Europe’s biggest asset manager recently said.

Pascal Blanque, who oversees 1.4 trillion euros ($1.65 trillion) at Paris-based Amundi, said rising markets and synchronized world growth reminded him most of the 1990s when gradual Fed rate rises allowed an extended bull market in equity but ended up pricking a bubble in tech and dotcom stocks.

“We wouldn’t be surprised to go through some correction. The idea of a linear thing prolonging what we have seen is a rosy view,” Blanque told the Reuters Investment Outlook Summit in London.

“It will be a bumpy year, but probably with entry points,” he said, adding he had raised cash holdings even as global stocks have clocked almost 20 percent gains this year.

While stressing he was still broadly positive on equities and emerging markets, Blanque is “reducing risks,” fearing some complacency over underlying economic problems.

(Newsmax wire services contributed to this report).

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More than a third of millionaires polled in CNBC's Millionaire Survey say the stock market will be flat to down next year.
cnbc, millionaires, pessimistic, stocks, 2018
Wednesday, 20 December 2017 03:59 PM
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