According to Michael Sonnenfeldt, founder and chairman of Tiger 21, wealthy investors are pivoting back to stocks, with one sector being perhaps the biggest opportunity in history.
Tiger 21 is a network of ultra-high-worth investors, executives, and entrepreneurs, and its members are investing in stocks, despite overall concerns about the economy. Their largest category? Public equities, specifically real estate, which has never happened before. While some bargains are to be had, that’s not the driving force behind the shift.
Exchange-traded indexes and funds are driving member investments, and a lot of FAANG stock – that is, Facebook, Apple, Amazon, Netflix, and Google – is staying steady or dropping slightly, opening up a lot of opportunity.
But the biggest and most exciting sector is energy. The oil and gas side has a lot of potential, but interest is growing significantly in renewables, specifically how to expand wind and solar opportunities. Renewable energy is an opportunity and an increasing investment theme that is getting a lot of attention.
According to Sinnenfeldt, many of the network’s 1,100 members were holding onto enough cash to pounce on good investment opportunities when they arise and being bullish on long-term equities. Most members have recession fears but feel good about long-term investments, like real estate and private and public equity.
The stock market hit its lowest point in mid-June 2022 but has rallied in recent weeks, cooling inflation fears a bit. David Kelly, the chief global strategist of J.P. Morgan Asset Management, even said that stocks could rebound and hit an all-time high within three years, adding that investing in equities at this point is a good idea.
But some investors are still on the fence, with Bank of America reporting that not only is investor pessimism high, but the allocation of stocks to assets is at the same level as it was during the Great Recession in October 2008.
Any opinions are those of Thomas Fleishel and not necessarily those of Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.