Ed Yardeni, founder and chief investment strategist at Yardeni Research, shares his insight on why the retail sales report was so strong and which sectors of the market are poised to do the best or worst. He also discusses what could cause another dip in the stock market.
The coronavirus pandemic wrought havoc on the markets – but it didn’t scare wealthy investors away from putting additional cash in private equity.
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In fact, ultra-wealthy individuals increased their investments in private equity to 26 percent in the first quarter, from 24 percent at the end of 2019, according to newly released data from Tiger 21. That was the highest level the firm has ever recorded among its wealthy clients.
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Private equity investments are considered riskier – having the potential of realizing high rewards and high losses.
Tiger 21 clients don’t just put money into funds, they also own businesses.
On the other hand, these investors reduced fixed income holdings to 8 percent – the lowest level in at least 10 years.
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Real estate holdings still remained at the top of investors’ lists – with allocation levels at 28 percent in the first quarter. Most other investments remained constant, including public equity (21 percent), cash (12 percent) and hedge funds (3 percent).
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The coronavirus pandemic has led to increased volatility – and uncertainty – among investors throughout the past three months. In March, for example, the Dow Jones Industrial Average suffered its largest one-day drop ever as the U.S. economy first began to shut down. The index declined more than 13 percent that month.
The major market indexes have since began to recover some of those losses. So far this year, the Dow is down more than 8 percent, while the S&P 500 is down more than 3 percent.
