American millionaires have reversed their priorities in the past year to focus on making money rather than preserving it as they wait to move their cash into stocks, according to a study conducted by US Trust, a unit of Bank of America (BofA).
According to the report, 60% of the high net worth investors surveyed said asset growth is a higher priority than asset preservation, a reversal of goals from a year ago when nearly 58% said that asset protection was more important.
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Yet, nearly two-thirds still said that reducing risk and achieving a lower rate of return is more important than pursuing higher returns by increasing risk.
The report revealed that a little over half (56%) of high net worth investors have a large amount of funds still sitting in cash accounts. Only 12% are content leaving their cash on the sidelines, yet 16% have immediate plans to move it. Two in five plan to gradually invest cash holdings over the next two years, and 35% have no plans to invest it.
Further, 57% of respondents said that pursuing higher returns regardless of the tax impact is a higher priority than minimizing taxes. Only 34% feel very well-informed about the impact of recent tax law changes on the total return of their investment portfolio.
Of the 711 high-net-worth adults with over $3 million in investable assets surveyed, 47% have created a financial plan to address long-term care needs that they and their spouse or partner might need, but only 18% have a financial plan that accounts for their parents’ long-term care costs.
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By GlobalData"The majority of people we surveyed grew up in middle-class families and created their own wealth. They don’t see themselves as wealthy, and many are unaware of risks and circumstances that grow increasingly complex as wealth accumulates," said Keith Banks, president of U.S. Trust.
"The wealthy have been disciplined about protecting their assets from market loss, but may have a false sense of financial security. They are not adequately planning for family health concerns or for the retirement that they want," he added.
