US Investors No Longer Prepared to Wait For The Long Term

by Philip Morton, Investors Offshore.com

19 July 2004

According to a recent survey, wealthy US investors are increasingly favouring investments that produce quick returns over more traditional long term buy-and-hold strategies.

The poll, undertaken by consulting firm Spectrem Group, revealed that investors are no longer prepared to ride out the long term peaks and troughs of the stock market in order to receive a return.

“Today's investors, fuelled by the boom markets of the late 1990s, are not content with achieving long-term growth. They want results now," the analysis stated.

The survey of 250 individuals with a net worth of more than $500,000 found that wealthier investors are increasingly prepared to utilise more sophisticated financial vehicles such as alternative investments and hedge funds to produce results.

Accordingly, the percentage of these investments in the portfolios of such individuals has risen from 1.5% in 2000 to 6.3% in 2003, the research found.

However, a general lack of understanding of alternative investment products was also exposed by the survey.

Almost 70% of those polled felt they were often overwhelmed by complex and hard to understand information on products such as exchange traded funds and mutual fund wrap accounts (where an investor’s assets are allocated across several investment managers).

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