Investors Are Still Holding Cash Despite Higher Market Confidence

Today’s wealthy investors seem to have split personalities.

Part of them is brimming with confidence and optimism. Survey after survey shows that they are back to pre-crisis boom years when it comes to their outlook for their own finances, their investments and their retirements.

Then there is the darker side. When it comes to their outlook on the broader economy or in stock markets, they take a dimmer view.

This contrast was on view in a recent survey from U.S. Trust. Its “Insights on Wealth and Worth” survey—which polls people worth $3 million or more (one-third of respondents had $10 million or more)—showed that 88 percent of respondents feel financially secure today and 70 percent feel confident about their financial security in the future.

A majority of millionaires now place a higher priority on growth than wealth preservation—a marked reversal from last year, when preservation topped growth.

However—and this is where the dual personality comes in—the wealthy are still holding mountains of cash. The survey found that 56 percent have a “substantial” amount of cash. Only 16 percent of them plan to invest that cash in the next couple of months. And only 40 percent plan to invest it over the next two years.

This may be a sign that the wealthy are confident psychologically, but they’re not quite ready to give up the security of their cash holdings, said Keith T. Banks, president of U.S. Trust and Bank of America Private Wealth Management.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu