When it comes to the investment appetite of millionaire investors around the world, it appears those in the U.S. are more aggressive as measured by their equity allocations. This is one of the numerous findings from our Legg Mason Global Investment Survey of more than 4,300 affluent investors around the world with over $200,000 in liquid assets. Included in the group were 2,164 millionaires – as measured in U.S. dollars – from around the world, including 250 from the United States.
We asked these respondents to tell us their asset allocation going into 2014, ran the averages, and this is the picture the data painted:
Average Asset Allocation
| U.S. Millionaires | Global Millionaires | |
| Equities | 43% | 22% |
| Cash | 17 |
25 |
| Fixed Income | 19 | 20 |
| Investment real estate | 7 | 19 |
| Non-traditional | 6 | 9 |
| Other | 8 | 6 |
According to our survey, U.S. millionaires had almost twice the allocation to equities than global millionaires on average, while global millionaires have almost three-times the allocation to investment real estate.
Asked to identify the asset classes that presented the best opportunities for 2014, both Global and U.S. millionaires said their domestic equity markets were their first choice.
Global millionaires then said real estate presented the next best opportunities in 2014, while U.S. millionaires picked international stocks.
Global Millionaires More Likely to Invest Globally
Fully 89% of global millionaires surveyed said they invest outside of their country, compared to 75% of other global investors surveyed.
In the U.S., 81% of millionaires told us they invest outside of the country, slightly more than the 77% of other surveyed U.S. investors.
Both U.S. and global millionaires who do invest internationally or are likely to do so agree on the countries that represent the best investment opportunities over 2014:
- U.S.
- Emerging markets
- China
Different Goals…
When asked to describe their primary goals of investing, there was a considerable difference between U.S. and global millionaires.
The top two choices among U.S. millionaires focused entirely on retirement and were:
- Provide for my own retirement
- Maintain my current lifestyle later in life
Global millionaires said their top two goals for investing were:
- Grow my wealth
- Protect my wealth
“Providing for my own retirement” was a distant fourth choice among global millionaires.
But Similar Approach…
Asked to define the decisions they made that have had “the most positive impact on investing success,” global millionaires point to the following top three decisions:
- Developed a financial plan
- Began working with or increased the role of their financial advisor
- Invested in products other than stocks and bonds
U.S. millionaires offered one different point, adding that a change in spending had a meaningful impact. More specifically, their top three decisions were:
- Began working with or increased the role of their financial advisor
- Changed my spending habits so I could save/invest more
- Invested in products other than stocks and bonds
Millionaire Advice
Finally, we asked millionaires to tell us what investment advice they would offer to the next generation. According to our survey, global millionaires recommend:
- Make a plan and stand by it over time
- Make sure you understand what you invest in
- Avoid short-term decisions based on emotion
- Start investing early in life
U.S. millionaires placed greater emphasis on starting early when it comes to investing; making it the number one piece of advice they would offer to the next generation.
Matthew Schiffman is the Managing Director and Head of Global Marketing Legg Mason Global Asset Management.
