Optimism: 75% of High Net Worth Investors Expect to Match or Beat the Market in 2013

70% worried reducing QE will depress stocks

BOSTON–()–Fidelity Investments® today announced the results of a survey of customers with at least $250,000 in investable assets on a range of topics that included potential tax increases, sector growth and opportunities in emerging markets. The survey found that more than three-quarters (77 percent) of high-net-worth investors expect to beat or match the market this year with approximately half (48 percent) feeling the stock market is appropriately valued and 17 percent feeling it is undervalued. At the same time, 70 percent of investors are concerned about the Federal Reserve reducing support for the bond market and, as a result, 88 percent of these investors are holding an average of 20 percent of their portfolio in cash for the right opportunity to invest.

“Investors feel optimistic that the economic recovery in the U.S. is under way, yet the memory of the market downturn is causing that optimism to be tempered,” said John Sweeney, Fidelity executive vice president, Retirement and Investing Strategies. “As investors feel more certain about job growth, encounter strong corporate earnings and better understand fiscal policy changes, they will invest in the market with more confidence. That confidence leads to better decision making and enables investors to withstand volatility in the market.”

Sweeney continued, “It is even more critical that investors create an investment plan to help them identify the appropriate exposure to equities that is right for them. Investors then should contribute to their portfolio regularly in up and down markets, and revisit their plan frequently to ensure it is working to meet their goals.”

The survey was taken during a “Fidelity Viewpoints®: Inside/Out” event in Boston on June 18, which also was broadcast to select Fidelity Investor Centers and via webcast. The event is part of Fidelity’s ongoing education effort designed to provide investors greater access to market insights from experts both inside and outside Fidelity. Other key findings of the survey include:

Investors on Market Conditions

  • Market Gains in 2013 – High-net-worth investors are increasingly optimistic about future gains in the market. In fact, 81 percent believe the Dow Jones Industrial Average will be up at the end of 2013.
  • Stock Market Valuations – Almost half (48 percent) of high-net-worth investors believe the stock market is appropriately valued, and 17 percent believe it is undervalued. This may be why the majority (78 percent) of high-net-worth investors prefer stocks over high-yield bonds.
  • Quantitative Easing Concerns – Looking ahead, 70 percent of high-net-worth investors worry the Federal Reserve’s end of quantitative easing threatens to depress stocks.
  • Housing Market Gaining Strength – More than three-quarters (77 percent) say the housing market will have a positive impact on the overall economy for the remainder of 2013.

Investors on Investment Performance and Guaranteed Income

  • Allocation Winners  For the year to date, 39 percent of high-net-worth investors say asset allocation has been the primary driver of their investment performance and 21 percent say sector allocation.
  • Importance of Guaranteed Income – Four in 10 (40 percent) of these investors say income products, such as annuities, are important to them to provide a steady payment in retirement.

Investors on Taxes/Volatility

  • Tax Increase Reactions – Thirty-two percent of these investors already have made modifications to their investment strategy as a result of income tax increases, and 21 percent plan to make some modifications. Still, 41 percent do not plan to make any changes.
  • Hedging Against Volatility – Fifty-three percent of high-net-worth investors are concerned about volatility as it impacts their portfolios, while 32 percent are focused on combating inflation.
Investors feel optimistic that the economic recovery in the U.S. is under way, yet the memory of the market downturn is causing that optimism to be tempered


Investors who are evaluating investment strategies for today’s market conditions can watch video highlights from the event or read a new Fidelity Viewpoint® entitled “Timely tips from five pros” based on the content shared at the forum by the Fidelity panelists, including Joanna Bewick (Fidelity Strategic Income Fund), Sonu Kalra (Fidelity Blue Chip Growth Fund), Tom Soviero (Fidelity Leveraged Company Stock Fund), Ramona Persaud (Fidelity Global Equity Income Fund) and David Prothro (Fidelity Corporate Bond Fund).

About the Investing for Income Poll

The Fidelity Investing for Income Poll was conducted June 18, 2013, via a webcast interface provided by On24, (which was also broadcast to select Fidelity Investor Centers and via webcast nationwide). On average, 1,047 attendees responded to each question and the majority has investable assets in excess of $250,000. On24 is not affiliated with Fidelity Investments. The experience of the affluent investors who responded to the Fidelity Investing for Income Poll may not be representative of the experiences of all investors.

About Fidelity Investments

Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $4.2 trillion, including managed assets of $1.8 trillion, as of June 30, 2013. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit www.fidelity.com.