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CALIFORNIA’S FINANCIAL WELL-BEING AMONG TOP CONCERNS FOR 84% OF LOS ANGELES INVESTORS

MORGAN STANLEY WEALTH MANAGEMENT POLL SHOWS LOS ANGELES AREA INVESTORS CONFIDENT IN PERSONAL FINANCIAL GOALS, BUT REMAIN CONCERNED ABOUT THE US ECONOMY, FEDERAL BUDGET DEFICIT AND INTERNATIONAL CONFLICTS

LA BEACH CITIES and the south Bay REAL ESTATE MARKET RANKED MOST ATTRACTIVE BY FAR; 40% OF LOS ANGELES INVESTORS BELIEVE NEAR-TERM GROWTH POTENTIAL IN THIS MARKET IS THE HIGHEST

LOS ANGELES INVESTORS APPREHENSION OVER INVESTING IN HEALTHCARE; MOST OPTIMISTIC ABOUT TECHNOLOGY

LOS ANGELES, JANUARY 31, 2014 – Los Angeles-area high net worth (HNW) investors are optimistic about the prospect of growth in the U.S. (46% “good”) and global (40%) economy, according to Morgan Stanley Wealth Management’s latest Investor Pulse Poll.[1] But when it comes to the future of California’s economy, area investors are not as bullish as their counterparts from the Bay Area.

35% of Los Angeles investors were pessimistic about California’s economy, as compared to 26% of Americans on their respective state economies.

On a municipal level, 20% of Los Angeles investors viewed the health of their local economy unfavorably, while only 10% of San Francisco’s investors felt the same way.

“It’s clear that Los Angeles investors are still concerned about the U.S. economy, and even more concerned about our state and local economies,” said Jeff Adams, Morgan Stanley Wealth Management’s Southern California Regional Director. “But these results show some compelling optimism as well. Local investors continue to be enamored with our rapidly growing tech sector, and they seem to see a great deal of promise in real estate, especially in the Beach Cities where the local tech sector is flourishing. The poll also demonstrates a strong preference for professional financial advice among local investors, with more than 80% saying they want guidance on tax policy and asset allocation.”

Los Angeles investors perceive the strongest real-estate market in Beach Cities and the South Bay, with West Los Angeles coming in at a distant second.

More than a third of Los Angeles investors expect real estate to take off in Beach Cities and South Bay (40%), while more than 12% feel the same way about West Los Angeles. The San Gabriel Valley (11%), Downtown (9%), and Silverlake/Los Feliz/Echo Park (also 9%) ranked low in investors’ minds while the San Fernando Valley (7%) came in last. 

Investors are confident in their own portfolios and prospects for achieving their long-term goals; current retirees have a slightly less rosy view.

An overwhelming majority (86%) of Los Angeles HNW investors say that they will achieve their long-term financial goals, and 30% are very confident of this

Similarly impressive proportions of those who have not retired are also confident (84%) that they are on track in their planning, with 28% very confident.

Los Angeles HNW investors are slightly more positive in their assessment of their situation than retirees among national HNW investors. Among the Los Angeles group, 38% say their portfolio is better than they expected (compared to 34% nationally)

Technology seen as top sector for 2014; healthcare outlook a mixed bag

Technology tops the list of promising sectors for Los Angeles investors, with 73% citing the industry as a “good” investment in the coming year. In fact, 79% say there is “significant” or “some” growth potential in the next three years. Rounding out the list of top investment sectors is bio-tech (65%), pharmaceuticals (64%), and energy (63%).

Meanwhile, area investors appear somewhat conflicted over healthcare with under half (46%) ranking it as a good investment, 28% saying it is a bad investment and 23% staying neutral.

Millionaires, predictably, are less concerned with most issues than Los Angeles HNW investors. The following is how they differ on a list of key concerns:

Affording quality healthcare at all times (61% vs. 73%)

Being a caretaker for older adults, spouses or significant others (38% vs. 51%)

Ability to retire when desired (35% vs. 50%)

Family’s financial well-being (35% vs. 56%)

Helping pay off student loans (12% vs. 19%)

Contrastingly, slightly more millionaires are concerned about the government budget deficit (87% vs. 84%). 

Investors want financial advice—specifically, communication and analysis as current events unfold.

68% of investors use one or more financial advisors

85% want guidance on changes in federal tax policy and exemptions

82% need guidance on portfolio’s asset allocation

78% desire clear communication on how assets can contribute to a retirement income stream

78% look for analysis of how economy and markets affect portfolio

76% wish to know about downside protection of portfolio

72% would like new investment ideas

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