Ninety-percent of Millionaires, who have a net worth of $1 million up to $5 million indentify risk as an important investment selection factor, ranking it at the top of their list of investment criteria.
Millionaires are also concerned with a closely related factor, diversification. Ninety-one percent identify diversity of investments as an important selection criteria. Company reputation ranks third, and is an important consideration to 85 percent of Millionaire investors. Eighty percent consider an investment’s track record.
In keeping with their sensitivity to risk, nearly half of Millionaires indicate it’s more important to protect principal than to grow wealth, according to our research. In comparison, only one-third of Millionanires indicated they would be willing to take on signficant risk to earn a high return.
Younger Millionaires – those under the age of 45 – are more willing to take on investment risk to improve returns, and are less likely to consider diversification when selecting investments. Social responsibility considerations are more important to young Millionaires. Half indicate they factor social responsiblity into their investment selection process, compared to 37 percent of Millionaires as a whole.