Ultra-Wealthy Are Shunning Stocks

From Robert Frank writing at CNBC.com:

Wealthy investors are shying away from U.S. stocks and putting more money into private companies, real estate and commodities, according to a study.

The Institute for Private Investors ... polled families with at least $30 million in investable assets. IPI found that the wealthy are shifting away from U.S. stocks in the search of safety and yield....

According to IPI, the moves are part of a broader shift, with the wealthy looking for hard assets rather than more speculative financial investments. “We are seeing a general movement toward owning real assets, and backing companies with real businesses, including startups..." 

Should everyday investors follow the lead of the $30-million-plus crowd?

Not necessarily. Buying a private company, for instance, isn’t in the cards for most investors saving for retirement. Acquiring a business often requires millions of dollars in capital....

What’s more, wealthy investors haven’t always been right when it comes to the stock market. Some studies show they were late getting out of the market pre-2008, and late coming back in before the rebound in 2009.

But there is one reason we should care about the investing patterns of the rich: they set the tone for the broader market. With the one percent owning more than 50 percent of the individually held stocks in the U.S., their lack of confidence in stocks can only make it harder for the market to move higher.

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Link: http://www.cnbc.com/id/47675207