Home Breaking News 75 Percent of the Super-Rich Expect a Recession

75 Percent of the Super-Rich Expect a Recession

by Paul-Martin Foss

In a recent survey of super-rich investors, nearly three-quarters believe that the US will enter a recession by 2020. According to the J.P. Morgan Private Bank survey, 21 percent of ultra-high net worth investors believe that the US will enter into a recession by 2019, with another 50 percent believing it will enter a recession by 2020. That should serve as a warning to ordinary investors to start looking to protect their assets as soon as possible.

For most ordinary investors, their major source of income is a wage or salary, and most investment income is intended to supplement their wages and grow a retirement fund, college savings fund, or some other sort of targeted investment. Many super-rich investors, on the other hand, aren’t reliant on wages and salaries. Their income comes from their investments, so they are particularly sensitive to factors that affect the economy and the investing climate.

A recession that would affect investment asset values would affect the incomes of the super-rich to a greater extent than those whose primary income comes from wages. That’s why surveys of this sort that highlight the sentiment of those investors who would most be affected by an economic downturn are so important to pay attention to.

While the US economic recovery is now the second-longest in history, it is only in the past few years, as stock markets have shot up to record highs, that there has been more of an upbeat attitude toward the economy and its health. But the recovery is really a recovery in name only, as the underlying economic fundamentals remain weak.

Job creation is still far below the path it should have been on before the 2008 financial crisis, wages are failing to keep up with the rising cost of living, especially housing, and there are multiple indications that stock markets aren’t the only markets that are in a bubble. The super-rich see all of that, which is probably why they’re worried that another recession is just around the corner.

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