Investing in cash - Cash remains investment of choice for millionaires

August, 2010

In January 2010 only 16.8 percent of investors indicated they would not be investing in the markets but rather investing in cash. By August that amount has increased to 22.0 percent. About 19.4 percent of Millionaires will Not Invest at this time while 24.8 percent of Non-Millionaires will not be investing. These numbers increased from 12.3 percent and 20.6 percent respectively in July. The fact that Millionaires are curbing their investment habits is an indicator that investor attitudes are unsettled. Millionaires, as mentioned previously, tend to have more optimistic attitudes than non-Millionaires. Their waning confidence could be a predecessor of challenging times.

While Cash remains the investment of choice at 54.8 percent, Stock Investing has crept up since August moving from 29.2 percent in July to 34.0 percent in August. Millionaires are investing in Cash at 52.7 percent and non-Millionaires at 57.0 percent. In contrast, 41.1 percent of Millionaires are investing in Stocks compared to only 26.4 percent of Non-Millionaires.

Stock Mutual Fund Investing decreased to 32.8 percent in August compared to 41.6 percent in July. Stock Mutual Funds are more popular with Non-Millionaires (36.4 percent) compared to Millionaires (29.5 percent). Bond Mutual Funds are interesting to 21.2 percent of investors with Millionaires having a much greater interest (22.5 percent) than Non-Millionaires (19.8 percent). Interest in Individual Bond investments increased slightly from July from 16.0 percent to 20.8 percent. Bonds are particularly attractive to Millionaires (27.1 percent) and not to Non-Millionaires (14.1 percent).

Real Estate remains relatively flat at 22.0 percent up from 18.4 percent in July. Real Estate remains a greater opportunity for Millionaires (27.9 percent) than Non-Millionaires (15.7 percent).

The greatest concern is the lack of interest investors have in investments overall indicating a lack of trust in the economy.