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Tags: Survey | billionaires | wealthy | cash

UBS Survey: Billionaires Clutching Tight to Their Cash

Monday, 22 September 2014 11:44 PM

Billionaires are apparently as nervous about the lofty level of financial assets as average investors.

Each of the world's 2,325 billionaires has an average of $600 million, or 19 percent of their wealth, stashed in cash, according to the Wealth-X and UBS billionaire census. That compares to an average of $160 million held in real estate and luxury assets.

"This increased liquidity signals that many billionaires are keeping their money on the sidelines and waiting for the optimal moment to make further investments," the report states.

Editor’s Note: Dow Predicted Will Hit 60,000 — Buy These 4 Stocks Now

Simon Smiles, chief investment officer for ultra-high net worth at UBS Wealth Management, says billionaires remain scarred by last decade's financial crisis and Europe's economic woes.

"The apparent safety of cash, reinforced by the painful psychological experience of the 2008-09 global financial crisis and the subsequent troubles within the European Monetary Union, likely reinforces the tendency to favor this cautious allocation strategy," he wrote in the study.

Perhaps the billionaires are on to something. Mohamed El-Erian, former CEO of Pimco, says that many investors are ignoring geopolitical and economic problems across the globe, as they bid asset prices to ever higher levels.

And that blithe attitude could well come back to bite them, he writes on Project Syndicate.

"In the next few months, the buoyant optimism pervading financial markets may prove to be justified," El-Erian says. "Unfortunately, it is more likely that investors’ outlook is excessively rosy."

Editor’s Note: Dow Predicted Will Hit 60,000 — Buy These 4 Stocks Now

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Billionaires are apparently as nervous about the lofty level of financial assets as average investors.
Survey, billionaires, wealthy, cash
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2014-44-22
Monday, 22 September 2014 11:44 PM
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