High Net Worth Investors Confident in U.S. Stocks

Stocks are the top asset in 2013 for high net worth investors, with nearly half of them reporting that they are planning to increase their equity position this year.

Stocks are the top asset in 2013 for high net worth investors, with nearly half of them reporting that they are planning to increase their equity position this year.

Fidelity Investments surveyed customers with at least $250,000 in investable assets at an event on March 5 revealed that investors expect continued growth in the domestic financial markets. Stocks have recently hit new highs, which has led to confidence in the markets and an expectation of strong returns for 2013.

“It’s reassuring to know that some of the most high net worth investors are optimistic about the future of the U.S. equities markets, even in the face of continued uncertain economic conditions in the near term,” said John Sweeney, executive vice president for Fidelity Investments. “This tells us that these investors are in the right frame of mind in this environment as they work to seize meaningful opportunities for their portfolios.”

Almost two-thirds (65%) of investors chose U.S. equities as the asset class they expect to invest in the most over the next year. Just 9% chose foreign equities and 6% picked corporate bonds. Half (49%) will increase their equity position in 2013, with 39% planning to keep their position the same and 11% reporting that they will decrease their position.

These investors are also feeling confident with 38% expected to beat market averages in 2013, up from 31% in 2012.

However, having investment confidence means high net worth investors simply have other concerns to focus on. A third (34%) of respondents is most concerned about income tax increases and 25% reported being most concerned with capital gains tax increases.

Another large concern is that the Federal Reserve’s constant intervention will finally result in painful inflation for the U.S. economy. A large majority (76%) are concerned that inflation will impact their portfolios, so 35% will primarily hedge against inflation with increased equity allocation.

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Fidelity Poll Results