BY PETER CHIECO
Well-to-do Americans, including ”” perhaps not surprisingly ”” some in Fairfield County, have a high sense of optimism for the future of their finances, according to a recent Morgan Stanley poll of high-net-worth investors.
But news that the rest of the state will be benefitting from a major influx of defense spending, thanks to the newly approved federal budget, could also have people smiling all the way from New York City to the Rhode Island border.
While statistics often can be interpreted with a measure of subjectivity, the extent of optimism for the near-term financial future is worth noting. According to the poll, 71 percent of the tri-state region respondents with $100,000 or more in investable liquid assets believe the national economy will be the same or better by the end of 2014.
A similar number have faith in the growth of the global economy at the end of 2014 ”” 74 percent ”” but interestingly, even higher percentages are optimistic about the state economy ”” 76 percent ”” and their local economy ”” 83 percent. More than 1,000 respondents were interviewed nationwide in the fourth quarter of 2013.
But while the poll shows there is plenty of fuel for optimism, there are some tempering factors for the state economy as well.
Connecticut”™s economy hasn”™t just lagged behind the nation”™s since the recession, it has also fallen behind those of all neighboring states except for Rhode Island. Some economists believe that Connecticut”™s economy was dealt a harsher blow during the recession and thus had a longer road to recovery than those faced by New York, New Jersey and Massachusetts.
Nonetheless, the budget compromise approved by Congress includes more money for submarines built in Groton, helicopters built in Stratford and jet engines built in several areas of the state. Besides money for the major defense contractors, the funding also provides relief to hundreds of Connecticut subcontractors that manufacture parts and components used in larger products.
The approved budget includes $3.3 billion for helicopters, including Blackhawks for the Army, Seahawks for the Navy and Nighthawks for the Marines.
President Obama signed the measure in mid-January, the day before federal funding was set to run out. Although the bill provides less spending than he had proposed, it funds every agency of the federal government and also scales back automatic spending cuts that hit the Pentagon and major domestic programs last year.
It may not be surprising that people with large amounts of disposable income know where to invest that money and are reasonably confident that it will grow in the coming year. But the confidence shown by the wealthy certainly can be emulated by the rest of us, leading to smarter investments or at least to a sense of confidence that tomorrow will be better than today.
At the very least there is more money coming to Connecticut to help keep working people on their jobs, and possibly hire back a few who have been unemployed. By any measure, that fits the definition of a win-win situation.
Peter Chieco is a private wealth adviser with the Private Wealth Management Division of Morgan Stanley Wealth Management in Greenwich. He can be reached at (203) 625-4897.
