Regional investors are optimistic about 2014, according to a poll from Morgan Stanley Wealth Management.
Recent volatility, however, did not escape notice.
The Jan. 29-released poll found 86 percent of respondents in Connecticut, New York and New Jersey expect their investment portfolios to be “better” or “the same” at year end; 84 percent believe their financial well-being will be the same or better.
“Parallel with a rising stock market, tristate investors expressed optimism about their portfolios for 2014 yet concern for stock market volatility ”” a concern greater than similar investors polled elsewhere in the nation,” said Bradley Barber, family wealth director and complex manager with Morgan Stanley Wealth Management”™s Greenwich office.
“As the survey was completed in December, those polled certainly seem prescient based upon the volatility we have witnessed in the past couple of weeks,” said Barber, who also manages the company”™s offices in Stamford, Ridgefield, Westport, Fairfield and New Haven.
“It seems to me that Westchester and Fairfield County investors have more realistic expectations than many investors outside of our tristate region,” he said. “While the stock market went up sharply in 2013, those in the tristate do not seem ready to simply take their profits and get out of the market. Rather, they apparently are using a little more caution as indicated by their preference toward dividend-yielding stocks.”
Locally, investors are most bullish about their backyard metro area economies: 83 percent said “same” or “better” for 2014, followed by bullishness on their respective state economies (76 percent), global economy (74 percent) and the U.S. economy (71 percent).
Investors in the tristate region expressed greater concern for terrorism in the U.S. versus investors in other regions of the country: 82 percent locally versus 66 percent in San Francisco and 63 percent in Denver, for example.
Other top survey concerns included U.S. economic prospects (89 percent expressed concern) and the federal budget deficit (83 percent). Worry about the trade deficit declined from 85 percent in Q1 2013 to 78 percent in the final quarter. A potential U.S. debt rating downgrade that had 85 percent worried in Q1 2013 was not among the top five concerns in the latest poll.
Asked to classify investment prospects for 2014 as good, bad or neutral, investors favored dividend-bearing stocks (61 percent said “good” vs. 48 percent in a similar Q1 2013 poll) and S&P 500 index funds (54 percent vs. 44 percent in the Q1 2013 poll).
The tech, energy and pharmaceutical sectors were viewed more favorably in the poll than were aerospace and insurance.
“While the poll shows that there is plenty of fuel for optimism, there are some tempering factors for the state economy, as well,” according to Peter Chieco, private wealth adviser with the private wealth management division of Morgan Stanley Wealth Management in Greenwich.
“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,” Chieco said. “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.”
