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Sophisticated investors get rich

By Judy Martel · Bankrate.com
Tuesday, November 29, 2011
Posted: 5 pm ET

Investor fear has driven down stock prices on even the best-quality equities, which makes for a great opportunity for iron-stomached, sophisticated investors to buy.

Yet watching the news for even one day could give investors plenty to worry about globally, and I haven't talked to a single seasoned investment professional who hasn't told me that we're in an economic and financial situation like none they've ever seen before. So it's understandable to want to avoid the market and stay safe.

But those who can look beyond the turmoil see buying opportunities. Even blue-chip stocks have lost value in the fallout from unsettling economic news in Europe and the U.S., and some experts urge investors to buy while they're cheap.

Although a recent study by PNC Wealth Management shows that an overwhelming majority of the millionaires they surveyed are more depressed about the economy today than they were during the height of the recession, more than half are satisfied with their own investment portfolio. Most expect to maintain their wealth in the coming years while only 16 percent expect a decline.

The focus of their dissatisfaction is not so much on their own financial portfolio but on a government they say is not working. The failure of the super committee to come up with a plan to reduce the $1.2 trillion deficit is but one example. More than half are also concerned that the economy is in for a slower recovery than previously thought.

All this spells more market volatility in the coming years as the global economy struggles to right itself. The millionaires surveyed say they predict the biggest growth for stocks next year in technology, utilities, health care and financial and the least amount of growth in retail stocks.

Given the economic outlook, it wouldn't be wise to put money in the market that you need for the short term. But as a long-term strategy, it could be a winner.

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