A good place to begin to parse how wealthier, more experienced investors are feeling right now is with the Fed, raising interest rates to combat inflation but at the risk of pushing the economy closer to recession as a result.
"That's the key question right now for all investors, big or small, or individual or institution: will the Fed have to resort to such significant measures that the only way to tame inflation is to put the economy into a recession?" Loewengart said. "We don't know the answer. We hear a relatively rosy sentiment from the Fed, but history doesn't support the likelihood of a soft landing. But it is also a unique time.
At the same time, more investors indicated they were adding to cash, not in large numbers, but a notable increase given the decline in stock prices that already had been experienced, rather than to the most beat-up sectors like technology. The percentage of millionaires who said they were adding to cash as a result of rising rates went from 24% to 31%, while there was also a 7% jump in millionaires who said they were investing in treasury inflation protected securities, from 25% to 32%.
"They still have confidence in the economy, just not in the market in the short-term and they are preparing for future rotations, even additional corrections down the road," he said.The survey's questioning on sector bets within the S&P 500 shows that inflation is dominating over any valuation analysis of stocks right now.
Among non-traditional investments, commodities are receiving a high level of interest among these investors, "a big jump and a meaningful increase," Loewengart said. The percentage of millionaires who said they were increasing their investment in commodities doubled from 11% to 22%.