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The Honolulu Advertiser
Posted on: Tuesday, April 29, 2008

Millionaires see weak economy, hope for '09

By Eileen AJ Connelly
Associated Press Business Writer

NEW YORK — Even millionaires are feeling the economic squeeze, with many saying they don't even "feel" wealthy. But as a group, they are optimistic that things will improve in the next year.

The Fidelity Millionaire Outlook, a survey of 1,000 people with at least $1 million in assets to invest, found that you don't have to be a laid-off worker in a rust belt state to have a negative view of the nation's economy.

Using a scale ranging from minus 100 as the worst to 100 as the best, the survey found that high net-worth individuals have a minus 50, or "very weak," view of the economy right now. But when asked where things will be next January, the grade rises to a positive 18.

That could mean millionaires see "today's problem as tomorrow's opportunity," said Jack Callahan, president of Fidelity Institutional Wealth Services, the unit that sponsored the survey, which was conducted by an independent research firm.

People with more than $10 million to invest other than their home and retirement savings — what Fidelity called "deca-millionaires" — have a more pessimistic view than those with less than $2.5 million.

About 19 percent of those surveyed do not consider themselves wealthy, even though they have, on average, $3 million to invest and earn at least $270,000 a year.

Callahan suggested that reflects people in this category struggling to maintain a lifestyle their income can't support. "It says these folks are spending beyond their means," he said.

Overall, 31 percent of those surveyed intend to put more money in the next year into fixed-income vehicles — typically bonds or preferred stocks that carry lower risk and guaranteed returns. About 27 percent plan to buy more individual stocks, with about half that, 14 percent, planning to increase real estate investments.