Japanese millionaires were the most likely to leave their wealth in cash, while North American investors favoured equities (putting nearly 30% of their money into the stock market). Australia’s millionaires put more of their wealth than the global average into property, which is unsurprising, given a quarter of the people on the Rich List got there through property investments.
A preference for cash wasn’t the only sign of caution those surveyed displayed. Even when they did invest in shares and property, most of the millionaires said they invested around 80% of their assets in their home country, as opposed to seeking out wherever in the world they could get the greatest return.
“Given recent market rallies, there is little doubt that the high allocation to more stable assets has likely caused some HNWIs to miss opportunities for wealth growth,” the report states.
“However, this is often a conscious decision as some HNWIs willingly forego returns in exchange for the safety of capital. As the global economy stabilizes and markets expand, HNWIs seeking growth will have the potential to put more of their wealth to more productive use.”
This is interesting because global interest rates are low. Low interest rates mean low returns for cash deposits, meaning investors would do well to pivot out of cash, as many wealth management advisers say.
It’s good advice. But it seems that for one reason or another, the world’s richest are favouring far more conservative investment strategies than the ones we’re normally advised to pursue.
Maybe they figure that once they’ve hit the jackpot, there’s little to be gained in jeopardising that. Or, perhaps, they’re still cautious about the global economy.
Myriam Robin is a media reporter at Crikey. She’s an economics graduate who previously reported on business for LeadingCompany and SmartCompany.
