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June 13, 2005
America's Rich Dialing Down R.E. Exposure
A recent study by Capgemini and Merrill Lynch found that the richest Americans have been cutting back on their real estate exposure as the rest of the country has been loading up:
The World Wealth Report showed that Americans with $1 million or more in liquid assets cut back their real-estate holdings to 13% of their portfolios in 2004, down from 17% in 2003. The decline followed an increase in 2003. The rich increased their investment levels in hedge funds, bonds and cash. "They're bringing down their total level of exposure and taking some risks off the table," says James P. Gorman, former head of Merrill's private-client group and now head of corporate acquisitions, strategy and research...Since the wealthy are often at the forefront of investing and financial trends, market experts say their shift could be a leading indicator of a market peak.
Rich Lower Risks on Mansion, Sweet Mansion [Wall Street Journal]
Comments
Couldn't this just be indicative of the trend that the rich are getting richer? Perhaps the rich aren't selling off their real estate, they're just not buying more, but their holdings in other areas have increased (thanks in part to the money-friendly policies of this administration) such that real estate makes up a smaller part of the pie.
Posted by: Pascal at June 13, 2005 11:58 AM
When R.E. is smaller percent of profolio - I
don't believe it is they are selling their penthouses and Hamptons mansions.
More like office buildings and shopping centers.
Don't think relates to housing price boom.
Posted by: Anonymous at June 13, 2005 12:43 PM
I didn't read the article. I'll just comment on the above post.
Buy low, sell high. It could be they're just cashing in some chips for simple profit-taking. It *is* a good time to be selling, whether or not the market is at its top. There is a reason why the rich...are rich. Could this be a sign?
Posted by: Hal at June 13, 2005 3:43 PM
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