Are you in the 70% or 30%?

Jan 9, 2023

High-net-worth individuals have one big strategy going forward—and it’s not playing the stock market.

High-net-worth individuals are planning to pour most of their money – by far – into real estate in 2023 and beyond.

In a recent study conducted by Fortune’s Chloe Taylor, the 1,200 ultra-high-net-worth members of the Tiger 21 network, comprised of entrepreneurs, investors, and executives, are “wealth preservers,” in the words of Michael Sonnenfeldt, the organization’s chairman. Worth a collective $130 billion, this ultrawealthy group knows better than most how to hang onto their immense assets.

So how is this group of investors building recession-proof portfolios going forward? The answer, as it turns out, is liquidity. Having enough liquidity on hand would help them “pounce on real estate opportunities in the next 12 months.” And it’s important to note, they are not seeking Real Estate Investment Trusts (REITs) or real estate mutual funds, but rather direct investments into hard assets versus paper assets, as is the case with REITs and mutual funds.
 
Almost 70% of these HNW individuals said they planned to invest in real estate in 2023, with multi-family units, medical, and tech facilities seen as strong holdings. Office and retail premises, meanwhile, were being avoided.
In comparison, a recent poll of retail investorsfound that just a third of amateur investors planned to invest in real estate in 2023, instead favoring equities—specifically big tech and green energy stocks. Which begs the question, where are they getting their guidance? Perhaps as history has shown, they likely aren’t. Or could it simply be a case of getting the wrong guidance?

 

When it came to stocks, the consensus among Tiger 21’s members was that the bottom was yet to be hit, even after investors contended with a consistently, and often dramatically, faltering market throughout 2022.

 


Sources: Fortune, Chloe Taylor, Tiger 21 Network, Michael Sonnenfeldt

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