Budget deficit and foreign turmoil also top list of investor fears for 2014
The direction of the US economy and the country’s budget deficit top investors’ concerns for 2014 despite a wave of optimism at the start of the new year.
Some 90 percent of US high-net-worth investors are ‘very or somewhat concerned’ about the prospects for the US economy this year, while 87 percent are worried about the country’s budget deficit, according to a Morgan Stanley Investor Pulse Poll.
A possible increase in foreign conflicts is a major concern for 82 percent of investors surveyed while 81 percent are worried about the US trade deficit and 75 percent are concerned about the potential effects of terrorism on the US economy.
Although investors are largely optimistic at the start of the year, with 88 percent expecting an increase or no change in their financial well-being, few expect a trouble-free year. Sluggish global growth, concerns over continuing strife in the Middle East, the tapering of the US Federal Reserve’s quantitative easing program, fears of rising interest rates and other issues in the US and abroad cloud expectations for 2014.
While in 2013, fears lingered about the European and US economic recovery, China is taking the forefront in 2014 with concern over its slowing growth. Still, stock market gains through 2013 despite high risk and global uncertainty are driving investors to hope for a repeat in 2014.
‘The experience of 2013 has not been lost on investors,’ Gregory Fleming, president of Morgan Stanley Wealth Management and Morgan Stanley Investment Management, says in a news release. ‘Despite a great deal of economic uncertainty, equity markets performed strongly as expectations accelerated for economic growth, and investors are looking for more of the same in 2014.’
Investors expect to end the year with an average of 42 percent of their portfolios devoted to equities, while cash and fixed income will come next, at 23 percent each, the study indicates. The poll surveyed 1,004 US high net worth investors between between October and December of 2013.
