Even the wealthy are feeling the impact of the lagging economic recovery. A recent survey found wealthy Americans are feeling increasingly cynical in their outlook toward the economy, investment prospects and the country's future.
The "Wealth and Values Survey Investors' Outlook," released by PNC Wednesday, found that only 10% of wealthy Americans feel optimistic about the U.S. economy, which is the lowest rate since 2006. In addition, 76% said they are even more down on the economic outlook over the next six months, up from 57% last year.
The survey was conducted online among 1,105 adults age 18 and up with more than $500,000 in investable assets, and a minimum annual income of $150,000.
Close to half of the wealthy Americans surveyed (47%) said they would describe the U.S. financial system as "broken," and in addition, 84% said they feel the U.S. political system has major flaws. These negative feelings are transferring over to their investment portfolios, the survey found, with pessimists outnumbering optimists at 34% to 26% when evaluating their portfolios in the near future.
"The survey captures the anxiety and frustration of the economic and political environment that we are in," Thomas P. Melcher, executive vice president and managing director of Hawthorn, the division of PNC Wealth Management that serves clients with $20 million or more in investable assets, said in a statement. "These results clearly tell us wealthy investors are looking for more positive news to get them back on a more confident path. But the bottom line remains: investors should look to the long-term horizon and determine their own risk tolerance. Over the years, contrarian investors have made a lot of money buying the doom and selling the boom."
This negative outlook isn't permanent, however, the survey found. Investors feel they will do well personally in the long-term, with 81% feeling "moderately confident" that they can maintain or grow their assets in the long term and 27% confident their assets will grow.
In addition, only 20% said their net worth has declined over the last five years, while 35% said it is even and 45% said their net worth has actually grown.