America's affluent, like the Fed, have a rather dismal outlook for the economy over the next six months.
The Fed isn’t the only one concerned and down about the immediate future of America’s economy. Last week it reported that there was more than a 50% chance that the country will fall back into another recession before the middle of 2012.
Now, America’s wealthy have a more dismal outlook on the economy than they had last year, according to a survey by PNC. But one of the sectors where they are choosing to put their money is the health sector.
Last year, 57% of respondents were downcast about the economy, which increased drastically to 76% this year. Only 10% were responded that they were optimistic.
Respondents to the Wealth and Values Survey Investors’ Outlook cited a number of reasons for their poor outlook. Nearly half (47%) said the financial system is broken, 84% see serious flaws in the political system and 61% believe that the current state of the economy is not only a result of the recession but also part of “a longer term decline in the health of the U.S economy.”
“These results clearly tell us wealthy investors are looking for more positive news to get them back on a more confident path,” said Thomas P. Melcher, executive vice president and managing director of Hawthorn, the division of PNC Wealth Management that serves clients with $20 million or more in investable assets. “But the bottom line remains: investors should look to the long-term horizon and determine their own risk tolerance. Over the years, contrarian investors have made a lot of money buying the doom and selling the boom.”
The view on the longer term seems a bit more positive, with 81% moderately confident that they can maintain or grow their assets over the long term. These responses are the result of how these investors have been doing since only 20% have seen their net worth decline over the last five years. More than a third (35%) reported net worth is even and 45% have actually seen their wealth grow.
The health, technology and energy sectors should have the biggest gains over the next year, and that’s precisely where wealthy investors are looking to put their money.