Where the wealthy invest and why the rest may follow them

The way that the wealthy invest is very different to others, in part, due to regulators wishing to protect those less-sophisticated investors. Also, historically, it has been a challenge supporting smaller investors when accessing relatively illiquid assets where the minimum capital required to buy a fund, a car, some real estate can be substantial. Knight Frank’s Wealth Report 2023 (January) interviewed 500 high net worth investors (HNWIs) interviewed from ten countries around the world offers us some insight as to where the wealthy invest. Furthermore in the report, despite the rising interest rates which has helped lead to three out of the four biggest banking collapses in the US, bonds were still categorised at safe and lower risk than equities.

Where high net worth investors hold their capital

Source: Knight Frank

Four biggest US bank failures

*Assets to nearest billion, ** From the Federal reserve as at 31/12/2022

Source: Bank rate

How HNWIs rank asset classes for stability (1 = safes…