Investors who own their own businesses or serve as senior corporate executives are most sensitive to the European debt crisis. How is the crisis affecting their investment strategies?
Nearly half of investors who serve as senior corporate executives view the European debt crisis as a major drag on the U.S. economy, according to the latest Millionaire Corner research. Investors who own their own businesses share this high level of concern.
Concern over the crisis has affected the financial –decision making of more than three-fourths of business owners and executives, according to our July survey of more than 1,400 investors. How are business owners and corporate executives changing their portfolios in response to the European debt crisis?
One-third of business owners and one-fourth of senior corporate executives are avoiding stocks and mutual funds with global exposure. (Previous Millionaire Corner studies have shown that a significant share of high net worth investors use international funds to diversify their portfolios.) One-fourth of senior corporate executives and 16 percent of business owners are avoiding fixed-income products from other countries. One-in-five small business owners say they are adjusting their small business strategy in response to the European debt crisis.
In comparison, less than one-third of all investors surveyed in July see the European debt crisis as a “major factor in the current United States economic problems,” and less than 60 percent are changing their investment strategies in response to the crisis. About 20 percent are avoiding stocks and mutual funds with global exposure, and 13 percent are avoiding investment in foreign debt products. (Global investing presents unique opportunities and risks.)
High net worth business owners and executives have been closely monitoring the European debt crisis and other international economic events for some time, according to a study conducted by Millionaire Corner over the first quarter of 2012. (Millionaire Corner defines high net worth investors as individuals from households with a net worth of $5 million to $25 million not including primary residence.)
More than 70 percent of these affluent investors said they are paying more attention to global economic events because what’s happening overseas is having a greater impact on their personal finances.