How the wealthy allocate investment

T

The Dude

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Matthew Schiffman
May 21, 2014
Sponsored by Legg Mason
When it comes to the investment appetite of millionaire investors around the world, it appears those in the U.S. are more aggressive as measured by their equity allocations. This is one of the numerous findings from our Legg Mason Global Investment Survey of more than 4,300 affluent investors around the world with over $200,000 in liquid assets. Included in the group were 2,164 millionaires – as measured in U.S. dollars – from around the world, including 250 from the United States.

We asked these respondents to tell us their asset allocation going into 2014, ran the averages, and this is the picture the data painted:

Average Asset Allocation

U.S. Millionaires
Equities 43%
Cash 17
Fixed Income 19
Investment real estate 7
Non-traditional 6
Other 8 6
 
Depends on how you become "wealthy" or a millionaire. Many people in the USA get over that Million-dollar "hump" via equity of some sort - and quite often in the form of stock-based variable compensation. I know few "millionaires" who don't have at least half their wealth in equities, and 20% fixed income seems rather defensive to me. Yes, we all have heard of the random 'Cleetus who made his fortune via a Monster-truck garage or savvy Beanie-Baby investments, but for the rest, nothing beats getting paid in stock, selling that stock, and spreading the wealth in usually more stock.
 
Correlation does not prove causation. I know several people who made their wealth, and still generate income from, real estate. So much FAIL for Dude here.
 
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