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Featured Advisor

Ed Meek
CEO/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, playing and following basketball, playing golf, and participating as an advisory board member for Breakthrough Urban Ministries.

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Risk Tolerance Among High Net Worth Investors

More investors consider themselves "aggressive'' about investments than in 2005, according to Millionaire Corner research.   

There is a degree of risk in almost every investment, and investors are varied in the amount of risk they are willing to take.

But the amount of risk an investor is willing to take can change based on the economic conditions that exist at the time of the investment. When the economy is going well, investments seem less risky, and when the economy is heading downhill, all investment seems iffy.

Spectrem’s Millionaire Corner annual study Affluent Market Insights shows how the level of risk changes among investors as times change. Looking back at the way investors made investments in 2005, prior to the hint of a recession, and the way investments were made in 2013, five years after the recession hit, show the effects the economy has on risk aversion.

Risk is the most significant factor in an investment, according to the study. When asked to select from a variety of concerns that affect investment, a huge majority of investors from all wealth segments said “level of risk associated with investments’’, which was by far the most often selected choice.

Among Mass Affluent investors with a net worth between $100,000 and $1 million, 88 percent said “level of risk’’ was a factor in their decisions. Among Millionaire investor with a net worth between $1 million and $5 million, 92 percent said “level of risk” was a concern, and among Ultra High Net Worth investors with a net worth between $5 million and $25 million, 94 percent chose that category as a concern when making investments.

For comparison, “diversity of investments” was the second most popular choice, and it ranged from 80 percent of Mass Affluent investors to 89 percent of UHNW investors. “Reputation of companies where investments are made”” was the third most popular choice, and it ranged from 76 percent among UHNW investors to 81 percent among Mass Affluent investors.

In 2005, Millionaire Corner asked investors to rate themselves as “conservative”, “moderate”, “aggressive” and “most aggressive’’ in terms of investment strategies. They asked investors again in 2013.

Among UHNW investors in 2005, 16 percent said they were “most aggressive’ or “aggressive”, the two highest levels of risk tolerance. In 2013, 32 percent of investors, exactly double the 2005 amount, listed themselves as “most aggressive’’ or “aggressive.”

The percentages for the two categories at the top of the risk-taking investors were similar among Millionaires. In 2005, 14 percent of Millionaires listed themselves as “aggressive’’ or “most aggressive”. In 2013, that number rose to 27 percent, again almost double the amount from eight years prior.

Mass Affluent investors have less money to invest, but they are also the youngest segment researched. But youth does not preclude conservative behavior, and they had the highest percentage of “conservative’’ investors, although that number decreased from 2005 to 2013. In 2005, 41 percent of Mass Affluent investors claimed to be “conservative’’ while in 2013 only 31 percent did so. Neither of the other two wealth segments reported more than 28 percent of “conservative’’ investors in either year.