Wealthy investors baffled, Barclays says

Bloomberg

More than two-thirds of 2,100 people surveyed worldwide said the risks of price fluctuations were still too high, even though almost 90 percent believe there were ways to make money in the current market, according to a report published Monday by the private banking unit of London-based Barclays.

"The vast majority of clients recognize that by historical standards there are great opportunities out there," Sednaoui said in an interview at his Geneva office. "But they have difficulty deciding whether a new storm will unleash, so aren’t willing to act." The world’s wealthy, defined as people with more than $1 million invested, probably saw their assets decline by at least one fifth last year, according to Scorpio Partnership, a London-based consulting firm specialized in wealth management.

The Standard & Poor’s 500 Index has climbed 40 percent since early March, paring losses for the past 12 months to 29 percent.

The Barclays survey targeted people with 500,000 pounds ($830,000) to 30 million pounds to invest and was conducted by the Economist Intelligence Unit between March and May.

"The length and the strength of the rally has been surprising," Sednaoui said. "Eventually we’ll see a correction. The question is whether it’ll be more fundamental than technical."

Barclays Wealth, which profiles clients to assess their risk appetite and composure in volatile markets, is adding psychometric testing to its portfolio management in the U.S. and Middle East, in addition to the U.K., Monaco and Switzerland, said Greg Davies, head of behavioral finance at Barclays Wealth. Barclays bought Lehman Brothers’s North American unit in September.