What's on the minds of Denver's wealthiest investors?
Affordable health care and the threat of terrorism are the top two concerns
More than half of Denver's high-net worth investors think there will be another recession in the next five years, according to a recent Investor Pulse Poll conducted by Morgan Stanley Wealth Management.
They also think the region’s housing market is both overpriced and unaffordable to first-time home buyers, but they're split on whether millennials should prioritize investing in a home above other financial goals.
Morgan Stanley Wealth Management’s Investor Pulse Poll is a survey of more than 1,000 national and local high-net worth (HNW) investors designed to measure the investment pulse nationally and in selected markets across the country. In Denver, college was another point of contention:
- 93 percent agree, and 55 percent strongly agree, that the sharp rises in cost are not justified
- 70 percent believe a college degree to be a “must” for students today
- 64 percent believe anyone who applies themself can find the financial aid and scholarships needed to afford college
There is far less consensus, however, on whether children should bear the responsibility of paying for their college tuition (51 percent agree) or whether a four-year college degree is worth paying for regardless of the price tag (47 percent agree).
Investing in the Future: Interest in Sustainable and Socially Responsible Investing
Six in 10 Denver-area HNW investors are at least somewhat familiar with socially responsible investing, with slightly less – 48 percent - considering themselves well-versed in sustainable investing.
Moreover, respondents overall are open to both concepts after being provided with brief descriptions. In particular, 68 percent are somewhat or very interested in sustainable investing, with 51 percent rating it as a “good” investment this year. Socially responsible investing is not far behind, with 62 percent expressing interest and 46 percent seeing promise this year.
Aligning with their interest in sustainable investing, Denver-area HNW investors rank renewable energy sources highest when focusing on specific types of energy investments in 2016 – with solar (64 percent rate as “good”) and wind (56 percent rate as “good”) taking the top spots. Natural gas (49 percent), the only traditional source to crack the top-five, and battery-powered electric vehicles (41 percent) follow not far behind.
When asked about a series of energy-related issues or initiatives, renewables garner the most support. In particular, expanding wind (88 percent) and solar (87 percent) farms topped the list of priorities for respondents.
Investment Considerations and Portfolios
Concerns about terrorism (85 percent), the prospect of affording quality health care (83 percent) and the government budget deficit (81 percent) weigh heavily on Denver-area HNW investors’ minds. More than half (55 percent) think there will be another recession in the next five years.
Denver-area HNW investors also overwhelmingly feel it is important for the federal government to address health care costs (90 percent), the economy (86 percent) and our nation’s infrastructure (80 percent).
When considering investments for this year, Denver-area HNW investors:
- Favor: dividend-bearing stocks (51 percent say “good”), actively managed mutual funds (42 percent), mutual or exchange-traded funds (42 percent), broad stock market and exchange-traded funds (38 percent), and a cash position (36 percent)
- Disfavor: hedge funds (7 percent say “good”), insurance (13 percent), private equity funds (16 percent), international stocks or mutual funds (20 percent) and bond funds (20 percent).
When considering various investment sectors, Denver-area HNW investors:
- Favor: technology (68 percent say “good”), pharmaceuticals (51 percent), renewable energy (51 percent), bio-tech (50 percent) and health care (48 percent)
- Disfavor: consumer discretionary (16 percent say “good”), insurance (22 percent), entertainment (24 percent), tourism (26 percent), financial services (28 percent) and industrials (28 percent).