Technology Stocks Lose Appeal Among Ultra High Net Worth Investors

Technology stocks have lost some of their appeal among high net worth investors, who now view the health care sector as equally attractive as the traditional favorite, high tech, according to a fourth quarter wealth study by Millionaire Corner.

Ultra High Net Worth Investors – those with $5 million to $25 million not including primary residence – are less likely to buy technology stocks in 2012 than they were in 2011, according to our study, published late last year. About 58 percent of investors expressed interest in purchasing technology stocks in 2012, compared to 63 percent who said they were likely to invest in the sector last year.

At the same time technology stocks have fallen in favor, health care stocks have gained in appeal among the Ultra High Net Worth. This year, wealthy investors are equally inclined to invest in health care stocks as they are in technology. The share of high net worth millionaires who say they are likely to invest in health care has grown to 57 percent for 2012, compared to last year when less than half the high net worth millionaires said they were likely to invest in the health care sector.

Interest in the financial service sector is down as well. More than one-fourth of Ultra High Net Worth investors said they were likely to purchase financial stocks in 2011. That share has dropped to 18 percent for this year.

The declining interest in financial service and technology stocks contrasts with investors’ heightened interest in investing in equities in general. Last year, just over half (52 percent) of Ultra High Net Worth investors said they were likely to invest in equities. This year, nearly two-thirds (63 percent) have expressed interest in purchasing individual stocks or stock mutual funds.

Interest in investing in cash has also increased significantly from just over one-third (35 percent) last year to just over half (51 percent.) this year. Ultra High Net Worth Investors are also more likely to purchase bonds this year. Close to half (47 percent) said they are likely to buy individual bonds or bond mutual funds in 2012, compared to 31 percent last year. Interest in investment real estate has doubled to 18 percent from 9 percent, and the appeal of precious metals, such as gold, has nearly doubled to 21 percent in 2012 from 11 percent in 2011.

The high tech sector has the highest appeal among Ultra High Net Worth Investors at the upper levels of the wealth segment. Seventy percent of those with $15 million to $25 million say they are likely to invest in technology stocks in 2012, compared to 48 percent of Ultra High Net Worth Investors with $10 million to $15 million.