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Bulls are running for the rich

By Judy Martel · Bankrate.com
Wednesday, March 26, 2014
Posted: 6 am ET

Investor confidence among the rich has soared to its highest level since the financial crisis, with more than half of the respondents in a survey saying they are bullish on the market for the next 12 months.

re-invest-stocks-lg_aIn a survey of global investors by deVere Group, 57 percent said their outlook on equities for the next year is bullish, compared with the previous high of 59 percent in March 2007. The low point since the recession came in 2011, when just 44 percent of investors were bullish.

Banner growth for the wealthy

"The overarching upbeat sentiment is, I suspect, as a result of the U.S. economy performing strongly even with quantitative easing being tapered, the eurozone returning to growth, and the UK's potential of reaching 3 percent GDP growth this year, amongst other key factors," deVere Group founder and chief executive Nigel Green said in a release.

This survey follows the news from Spectrem Group that 2013 was a banner year for growth among the wealthy in the U.S. The number of households with a net worth of $1 million or more surged to pre-recession heights, largely due to stock-market gains from 2012 to 2013.

In both the Spectrem and deVere surveys, a majority of investors say they plan to continue investing in the stock market over the coming year.

Global economic challenges

But Green cautions global investors to take note of potential bubbles. He particularly raises questions about whether the recovery in the U.S. and the United Kingdom is becoming reliant on real estate values, which might lead to another bubble like the one we experienced in the years before the financial crash. He also noted that the eurozone's recovery is being led by northern economies, and that China's growth could be hampered by commercial debt.

Despite these clouds on the horizon, Green remains optimistic. "Even bearing those points in mind," he said, "there's no doubt that, overall, the world looks a safer, more 'normal' place now for high-net-worth investors than it did this time last year."

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