One of the reasons the rich keep getting richer is that they know where to put their money to get the best returns – and, typically, the wealthier the investor, the more savvy the investments.
So for those of more modest means, it can pay to learn how to invest like a millionaire.
For one thing, millionaires have access to better information than most investors and so can make more informed decisions. To get a similar benefit, average investors need only follow their lead.
But there's another, even more important reason to watch how millionaires invest: The top 10% of Americans own more than 80% of the stocks. An infusion of capital on that scale means that when the rich take a liking to a particular investment, the price will almost surely rise.
So, where are these rich investors putting their money today?
Recently CNBC commissioned a Millionaire Survey – people with investible assets of $1 million or more – to determine what the rich thought of the markets, the economy, and where they were planning to invest.
One of the most positive signs that emerged from the survey is that millionaires are generally optimistic about the markets – which means they'll be fueling more share-price gains.
More than half (54%) said they believed the Standard & Poor's 500 Index will end the year up 5% to 10%, while 16% are expecting a 10% to 15% pop. Just 16% see the S&P 500 ending the year flat, and only a handful, 7%, think the index will drop 5% to 10%.
When asked about asset classes, the millionaires still prefer stocks, even with the markets flirting with record highs. Over the next year, 46% planned to buy stocks, 21% fixed income, and just 14% short-term cash instruments (the balance was spread among an assortment of investment classes, such as real estate, international investments, and precious metals).
Those surveyed said they currently have 44% of their investments in stocks, with 15% in fixed income and 19% in real estate.
But for most investors, it was what these millionaires had to say about their favorite sectors for 2014 that's most valuable…
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.