Record number of millionaires betting against stock market in 2023 — here’s why
Millionaire investors are predicting that stocks will fall in 2023 — and substantially. According to the CNBC Millionaire Survey, which consulted investors with $1 million or more in investable assets, 56% of millionaire investors anticipate that the S&P 500 will decline by 10% in the new year and nearly a third anticipate slippage of more than 15%.
See: How High Will Interest Rates Go in 2023?
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Millionaires haven’t been this bearish about the economy since 2008, during the height of a recession. So what’s driving them to be so pessimistic?
Inflation
Inflation has been unstoppable in 2022, and will continue to be a force to be reckoned with in 2023. Indeed inflation has been so untenable that it’s even got millionaires in a tizzy over whether they will have enough to retire.
Rising Interest Rates
On Dec. 14, the Federal Reserve raised interest rates yet again by half a percentage point. Rising interest rates (along with inflation) have some millionaires delaying big purchases including homes and cars.
Looming Recession
Fears over a long talked about recession are also at play. Typically when a recession is on the horizon, the stock market spirals, as it has been doing for much of 2022.
Explore: 5 Reasons To Expect an Economic Recession in 2023
Find: Will House Prices Go Down in 2023?
Interestingly, there does appear to be an optimism gap here, tied to age. In other words, younger people seem to have a rosier outlook on what the economy holds in 2023.
The CNBC survey found that 81% of millennial millionaires expect their assets to be greater at the end of next year, with nearly half (46%) anticipating their assets to be up 10% or more. Meanwhile, 61% of baby boomer millionaires expect their assets to be lower or “much lower” in 2023. Additionally, more than half of millennial millionaires said the S&P 500 will be up 10% or more in the new year.
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This article originally appeared on GOBankingRates.com: Record Number of Millionaires Betting Against Stock Market in 2023 — Here’s Why
