How the Wealthy Are Allocating Their Portfolios Now

The affluent are feeling gloomy, but they’re not exiting the stock market.

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Even wealthy Americans are feeling gloomy about the future. More than half of affluent investors say they are pessimistic about stock market performance over the next year, according to a new survey.

Specific worries include a recession (61 percent), inflation exceeding portfolio returns (59 percent), having enough money to support their desired lifestyle (50 percent), and affording family healthcare costs (47 percent), an online survey by PNC Wealth Management and Harris Interactive found. Respondents included 781 workers with at least $150,000 of annual income and $500,000 or more in investable assets and 482 retirees with at least $1 million in investable assets.

But affluent investors aren't running scared from the stock market. About half of the typical wealthy investor's portfolio is in domestic stocks and mutual funds. They have made no significant changes to their portfolios since the survey was conducted last year.

How the wealthy allocate their portfolio

Domestic Stocks 25 percent
Mutual Funds 24 percent
Cash 15 percent
Bonds 12 percent
International stocks 8 percent
Investment real estate 8 percent
Private Equity Funds 2 percent
Exchange Traded Funds 1 percent
Hedge Funds 1 percent
Other 5 percent

Source: PNC Wealth Management, 2008.

When asked to pick the sectors that have the best chance for gains in 2009, wealthy investors largely chose energy/utilities (66 percent), technology (51 percent), and healthcare (46 percent). Unsurprisingly, only 19 percent of affluent investors think the financial sector will do well, down from 29 percent last year.