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Millionaires sing the recession blues

An increasing number of millionaires don’t feel wealthy, largely due to the losses they experienced in the markets last year, according to a study released by Fidelity Investments of Boston.

Almost half — 46% — of participants said they do not feel wealthy and are re-assessing their investments, reflecting an increase from the 19% that reported the same in last year’s survey.

The third annual survey of more than 1,000 millionaires was conducted online in February by Richard Day Research Inc., an Evanston, Ill.-based research firm.

Those surveyed had an average of $3.5 million in investible assets and an annual income of $306,000, Fidelity noted.

That group reported an average 19% drop in household income and investible assets and a 28% decline in the value of their real estate, compared with last year.

And as would be expected in the wake of market turmoil, they are reassessing their portfolios.

“It’s a good lesson for advisers working with all investors that many of these millionaires are taking this as an opportunity to reassess their long-term objectives around their portfolio,” said Michael Durbin, president of Fidelity Institutional Wealth Services.

When asked about the single category that they believed promised the best returns for the next 12 months, 34% of participants picked bonds, fixed income, certificates of deposit and money market funds. Some 28% said stocks.

Millionaires were split on where they would increase their investments in the coming year.

Of those surveyed, 32% said they plan to increase their exposure to fixed income, bonds and CDs over the next 12 months and 31% said they will invest more in individual stocks.

Twenty-five percent said they would invest more in mutual funds, 20% said IRAs and 19% said employer-sponsored retirement plans.

The decision to choose between a fixed-income and equity investment could vary with the age of the investor, Mr. Durbin said.

The average age of those surveyed was 59.