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Novelist F. Scott Fitzgerald once said, “The rich are different from you and me” to which Ernest Hemingway responded: “Yes, they have more money”.
As with many famous anecdotes, there was some embellishment and it didn’t quite happen the way you might expect. However, Hemingway was right. One of the clear differences is the rich do have more money, but not only are the rich different because they have more money, it’s also been suspected they tend to invest differently to us average folk.
We finally have some conclusive proof on that. A study titled “Asset Allocation and Returns in the Portfolios of the Wealthy” was released in July by economists Cynthia Mei Balloch and Julian Richers. The pair had access to a database of investment portfolios of almost 60,000 investors which included portfolios of the top 0.01% of wealth. This is interesting because while the wealthy have most of the wealth, as the study notes, there has never been any direct empirical evidence of how the wealthy invest.
Read the full Rich and the Lure of Alternatives post.
This represents general information only. Before making any financial or investment decisions, I suggest you consult a financial adviser to take into account your personal investment objectives, financial situation and individual needs. Anyone looking to build a portfolio should seek financial advice to find out which strategy is right for them, if you are seeking financial advice then you should consider one of Australia’s best financial advisors who may be able to help you identify your goals and put in place a reliable strategy to pursue them.
