Real estate is the top alternative investment millionaires are considering this year according to a new report from Morgan Stanley.
“After a year where the Standard & Poor’s Index rose 30 percent, some millionaires are moving money out of traditional, long-only strategies to find outperformance, and turning toward alternatives such as real estate and private equity,” Gary Kaminsky, a vice chairman at Morgan Stanley Wealth Management in New York, told Bloomberg News in this article. “Sophisticated, high-net-worth investors are much more concerned about losses.”
During an interview with Bloomberg News recently, Kaminsky said wealthy investors see stocks getting expensive and interest rates staying stable or even declining over the next couple of years which is why they are looking to real estate for returns and income. Kaminsky was quoted at a meeting for Tiger 21 investors recently in Scottsdale, Arizona.
Tiger 21 members, who have at least $10 million in investable assets, increased their average allocation to real estate last year to 21 percent as of the fourth quarter from 19 percent in the first three months of 2013, according to a separate study released last month.
Will Ade, a Tiger 21 member, told Bloomberg real estate is a particularly attractive investment as stocks show vulnerability in 2014. The S&P 500 has fallen more than 4 percent this year, while developing-country stocks have tumbled on concern that the outlook for economies is worsening.