Column: Connecticut’s wealthy investors opt for aerospace

BY BRADLEY BARBER

It should come as no surprise that Connecticut’s high-net-worth investors are trending toward aerospace investments, even as others in the New York City metropolitan area are lukewarm at best in their feelings toward that sector.

A new Morgan Stanley poll shows that while aerospace was rated “good” by only 29 percent of respondents nationally, that number mushroomed up to 40 percent in Connecticut.

The state’s high-net-worth investors are showing that they know their region and what makes it tick. Last year, for instance, the state received the welcome news that the federal government was planning on a significant expenditure of defense dollars in Connecticut.

That means jobs and stability for some of the world’s major players in the defense industry, including those behemoths operating in the Nutmeg State. For instance, at least one of the major aerospace firms headquartered in Connecticut has forecast a higher per-share yield in 2015 than was realized last year, in addition to higher sales.

The same firm is looking into a more aggressive sales and acquisitions posture in the coming year and has set aside a minimum of $1 billion for that purpose.

In addition, while industry rumors about sell-offs in Connecticut’s aerospace sector were rampant for some periods last year, they have since been quieted, lending an air of stability to the industry. Some corporate executives have noted that state defense companies that have benefited from the influx of federal dollars are not likely to upset that apple cart.

On the downside, a significantly lower percentage of Connecticut high-net-worth investors see housing as a viable investment sector. In fact, while housing was rated highly by 46 percent of respondents nationally, and by 56 percent in New York, that number crashed to only 26 percent in Connecticut.

Once again the poll shows that Connecticut’s high-net-worth investors are keeping a close watch on events in their state. Statewide, jobs have grown by about 25,000 in the past year, and some experts expect that trend to increase somewhat, although Connecticut’s pace is still behind the nation.

Analysts maintain that consumer confidence is significantly affected by the economy, and a potentially difficult state budget for 2016 could have a negative impact.

And while a significant increase in jobs could spur a similar increase in demand for housing, Connecticut investors obviously don’t feel comfortable about that happening in the near future. For instance, a recent federal report shows that while there is increased demand for condominiums in Connecticut, the median sale price of condos in the state has seen decreases.

Overall, analysts are predicting a bullish outlook for investing in 2015 and a reasonable rate of growth without undue inflation.  Those investors who take the time to analyze their region’s strengths and weaknesses are certain to find investment opportunities that fit their portfolio and goals as well as those to avoid.

Those who take time to do valid research, seek out qualified advice and proceed with an investment plan that has a solid base will find that rewards are not only possible, but probable.

Bradley Barber is a complex manager with the Global Wealth Management Division of Morgan Stanley in Greenwich. He can be reached at 203-625-4815. The Morgan Stanley Investor Pulse Poll was conducted via telephone interviews Oct. 14 to Dec. 2 by GfK Public Affairs & Corporate Communications. A total 327 respondents in the greater New York metro market were interviewed using a listed sample of landline phone numbers pre-identified as high-net-worth households ($100,000 or more in liquid investable assets).