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A million bucks ain’t what it used to be, but the seven-figure set still reportedly own about 85% of all individually held stocks — so it may be worth paying attention to the yellow flags when millionaires say they’re bearish enough to commit only a third of their cash to equities.
On that note, a majority of millionaires are looking for the S&P 500 SPX, -0.21% to finish the volatile year stuck in the red, according to the latest CNBC Millionaire Survey. They also expect new market highs won’t be reached until at least a year from now.
Hence, they plan on committing a smaller chunk of change to the stock market.
In other words, no V-shaped recovery, despite the recent strength in the major indexes. In fact, more than a third predict that the S&P will be down by at least double-digits by year-end, while 10% believe it will take two years or more for stocks to revisit their February highs.
“They’re more cautious,” said Catherine McBreen, managing director of Spectrem Group, which joined CNBC in conducting the poll. “It’s not just the recession they’re looking at but also the election in November, which is also looming out there and hard to project.”
She explained that they plan to take some risk off the table by putting 19% of their assets into cash or cash equivalents. This on top of their already lofty piles of cash.
Those opting to go the equity rout will be focusing on health care, tech and financials, while fewer than 10% plan to put their money to work in energy, materials or industrials.
The semiannual survey polls 750 investors with $1 million or more in investible assets.
Cash wasn’t the worst place to be Thursday’s session, with the Dow Jones Industrial Average DJIA, -0.57% , S&P 500 and Nasdaq Composite COMP, -0.46% all turning lower.
