Wealthy investors are more likely to invest internationally, according to Spectrem's Millionaire Corner research.
The deterioration of life in Iraq has investors worried. Many of them were already concerned about the breakdown of a relatively stable Russia and Eastern Europe.
While political instability runs roughshod over matters in the Middle East and in Europe, the economy of the world becomes more intertwined. What happens on the other side of the world can indeed affect investments in the United States.
Oil prices could fluctuate greatly as the Northern Hemisphere enters it summer months, with holiday and vacation travel in position to be affected. Meanwhile, the price of the world’s safe haven, gold, continues to climb.
Concerns over global events is affecting all levels of investment strategies. While looking at financial reports and quarterly earnings reports and job market data, investors are also keeping an eye on negotiations over foreign affairs.
For many investors, this is business as usual.
In its ongoing research, Spectrem’s Millionaire Corner regularly asks investors whether they pay attention to global events to determine their investment strategies. Some segments of investors are ahead of others in that area of expertise.
In its Ethnic Segmentation Series of reports, Spectrem asked investors of Hispanic, African-American and Asian backgrounds whether they pay more attention to global economics because it is having a greater impact on their own wealth levels. Fifty-six percent of Hispanic investors said “yes’’ while only 48 percent of Asian investors and 40 percent of African-American investors agreed. However, among all investors surveyed by Spectrem for its studies, only 35 percent of investors said they were paying greater attention to global events.
RELATED: Five Tips for Global Investors
In a first quarter study of Ultra High Net Worth investors with a net worth of between $5 million and $25 million, 58 percent of investors said they were paying greater attention to global situations to see how it is affecting their investments.
Sixty-five percent of investors between the ages of 60-64 said they were watching global events for investment purposes. Even 54 percent of investors under the age of 53 had their eye on the world for that purpose.
Interestingly, 64 percent of investors who are completely dependent on their advisor for investment advice are eyeing the events of the world. Perhaps those investors are calling their advisor regularly to make sure their investments are safe from global distractions.
Wealthier investors are more likely to have concerns over international affairs and are also more likely to be invested internationally. In Spectrem’s Millionaire Corner Affluent Market Insights report for 2014, 37 percent of UHNW investors said they plan to invest internationally over the next 12 months, while only 28 percent of Millionaire investors with a net worth between $1 million and $5 million plan international investments, and only 17 percent of Mass Affluent investors with a net worth between $100,000 and $1 Million plan to do so.
Among the UHNW investors investing internationally, they are looking at safer markets, like China (20 percent), Europe (21 percent), Canada (17 percent) and Brazil (17 percent). Only 8 percent of UHNW investors are looking to invest in India, one of the more stable Middle Eastern economies.