High net worth investors v average retail investors

Type_45

High net worth investment strategy v retail investors....

High net worth investing (the top 10 percent of investors):
- Invest in assets which go up in value and have a residual value (residual value means cannot go to zero)
- Invest in their own businesses, their own real estate, and rental properties
- They own a lot of bonds due to the guaranteed payments coming back from them plus their money back so there's no risk
- They only have 20% of their money in equities.  That's the only risk part of their portfolio

The average retail investor:
- 80% equities

Albermarle

Maybe the average retail investor does not have the Millions to invest in their own business/real estate?
They only have 20% of their money in equities.  That's the only risk part of their portfolio
No risk at all in running your own business, is there ?

coyrls

Type_45 said:

High net worth investment strategy v retail investors....

High net worth investing (the top 10 percent of investors):
- Invest in assets which go up in value and have a residual value (residual value means cannot go to zero)
- Invest in their own businesses, their own real estate, and rental properties
- They own a lot of bonds due to the guaranteed payments coming back from them plus their money back so there's no risk
- They only have 20% of their money in equities.  That's the only risk part of their portfolio

The average retail investor:
- 80% equities

Are you able to give any source for your assertions?

jimjames

How do you define HNW investors? And how is that data averaged out? There are a few vocal BTL investors but I'm not sure they'd make much impact on the average. I'd also suggest that investing in your own business invariably means you own the equity in it which would contradict the assertion that HNW own little in the way of equities. Most of Bezos and Gates wealth is held up in the shares of their companies.

Type_45

coyrls said:

Type_45 said:

High net worth investment strategy v retail investors....

High net worth investing (the top 10 percent of investors):
- Invest in assets which go up in value and have a residual value (residual value means cannot go to zero)
- Invest in their own businesses, their own real estate, and rental properties
- They own a lot of bonds due to the guaranteed payments coming back from them plus their money back so there's no risk
- They only have 20% of their money in equities.  That's the only risk part of their portfolio

The average retail investor:
- 80% equities

Are you able to give any source for your assertions?

The points I raise are mentioned right at the end of the conversation:  1hr45m onwards.  But worth watching before that too.

https://www.youtube.com/watch?v=bQAC68MxahA&t=3069s 

TBC15

So who’s high net worth in £ terms.

Type_45

jimjames said:

How do you define HNW investors? And how is that data averaged out? There are a few vocal BTL investors but I'm not sure they'd make much impact on the average. I'd also suggest that investing in your own business invariably means you own the equity in it which would contradict the assertion that HNW own little in the way of equities. Most of Bezos and Gates wealth is held up in the shares of their companies.

I literally define it.  Have a re-read.

Dh6

Has your other thread finally ran it’s course Type_45? 

Yawn 🥱 

coyrls

Type_45 said:

coyrls said:

Type_45 said:

High net worth investment strategy v retail investors....

High net worth investing (the top 10 percent of investors):
- Invest in assets which go up in value and have a residual value (residual value means cannot go to zero)
- Invest in their own businesses, their own real estate, and rental properties
- They own a lot of bonds due to the guaranteed payments coming back from them plus their money back so there's no risk
- They only have 20% of their money in equities.  That's the only risk part of their portfolio

The average retail investor:
- 80% equities

Are you able to give any source for your assertions?

The points I raise are mentioned right at the end of the conversation:
 

I agree he said what you wrote but he provided no sources.

Here's some thoughts, he said that high net worth individuals have a lot of money invested in their own "real estate" and in this country a lot of non-high net worth individuals have a lot of (leveraged) money invested in their homes (their "real estate") in many, if not most cases exceeding their investments in equities.  On that basis asserting that the average retail investor has 80% investment in equities is surely unsupportable.

If you include pensions as investments, then the default funds in which the majority of investors have their investments are all under 80% equities.  Other than their own properties ("real estate"), pensions are likely to form the bulk of the average retail investors investments.

The vast majority of retail investors that are advised by an IFA will have less than 80% equity investments, as most people's risk appetite would not justify 80% equity portfolios.

jimjames

Type_45 said:

jimjames said:

How do you define HNW investors? And how is that data averaged out? There are a few vocal BTL investors but I'm not sure they'd make much impact on the average. I'd also suggest that investing in your own business invariably means you own the equity in it which would contradict the assertion that HNW own little in the way of equities. Most of Bezos and Gates wealth is held up in the shares of their companies.

I literally define it.  Have a re-read.

Top 10% of investors sounds very vague. Investors in what? So it's self selecting by excluding anyone who holds cash?

eskbanker

Even if there was any validity in those wild sweeping generalisations about what different types of investors are assumed to buy, the fundamental question would remain: so what?