Ultra-Wealthy Investors More Optimistic About 2008 Returns Despite Market Turmoil

- Housing Market Concerns Minimal, PNC Survey Finds -

Dec 13, 2007, 00:00 ET from PNC Wealth Management

    PHILADELPHIA, Dec. 13 /PRNewswire-FirstCall/ -- Despite a turbulent
 stock market, nearly six out of 10 ultra-wealthy Americans -- compared to
 31 percent a year ago -- express more optimism about their investment
 portfolios in 2008, according to a survey by PNC Wealth Management, a
 member of The PNC Financial Services Group, Inc. (NYSE:   PNC).
     Asked for their outlook on the components of their investment
 portfolio, 58 percent of the respondents with $10 million or more in
 investable assets say they are much more/somewhat optimistic. Only 4
 percent said they were somewhat more/much more pessimistic.
     "When our survey was taken, interest rates were on the way down. The
 ultra-wealthy likely are looking longer term, knowing that historically the
 stock market has advanced during times when interest rates are falling,
 said Thomas Melcher, managing director and chief investment officer of
 Hawthorn, the division of PNC Wealth Management that serves clients with
 $20 million or more in investable assets.
     He added, "With a greater capital base, the ultra-wealthy are often in
 a better position to withstand market volatility. Markets rise and fall
 over time. But the act of investing is long-term by definition and we
 advise people to diversify in order to smooth out the bumps."
     Concerns About U.S. Economy
     Yet caution remains the word on the U.S. economy, as 44 percent of the
 survey's overall 1,509 respondents (all of whom had at least $500,000 in
 investable assets) are more pessimistic about the national economy in 2008,
 up from 35 percent a year ago. Those who are more optimistic dropped to 27
 percent compared to 38 percent last year. In addition, 35 percent are now
 concerned about a recession, up from 28 percent a year ago.
     "There is no question the economy is slowing, but when you look at the
 statistics, it remains on stable ground," Melcher said. "The presidential
 election cycle often brings skewed perceptions about the economy."
     New Year's View: Investments, Real Estate
     The fourth annual Wealth and Values Survey by PNC, which is among the
 nation's top 20 wealth management firms, also revealed insights about the
 following investment-related matters in 2008:
     Stock Market Outlook: Optimism is lower about the overall performance
 of the stock market, as 39 percent say they are more optimistic, down from
 51 percent last year. The survey showed that pessimism has increased to 27
 percent from 15 percent. About a third, 34 percent, are taking a
 wait-and-see attitude, saying they are neither more optimistic nor more
 pessimistic, the same as a year ago.
     Portfolio Performance: Despite stock market concerns, the wealthy
 overall are positive about their own investment decisions, but less so than
 the ultra- wealthy, PNC found. Among all respondents, 45 percent are more
 optimistic about the components of their investment portfolio while 13
 percent are more pessimistic and 42 percent are neither more optimistic nor
 more pessimistic.
     Sectors - Best Bets: When asked which investment sectors have the best
 chance for gains in 2008, 61 percent chose energy/utilities, followed
 closely by technology (59 percent) then health care (53 percent). Next was
 the financial sector (29 percent), followed by manufacturing and
 transportation (both 10 percent) then retail (8 percent).
     Real Estate Market: The wealthy are concerned about the real estate
 market in general, but not their own investments or the value of their own
 residence. More than half (56 percent) said they are more pessimistic about
 the real estate market in 2008, compared to 46 percent a year ago. But only
 23 percent of homeowners are concerned about the value of their primary
 residence if the current downturn in the real estate market was to continue
 into 2008. More than half, 56 percent, are not concerned. Further, only 27
 percent of those with real estate investments other than their residences
 are concerned about the value of their investments if the current downturn
 continues, compared to 55 percent who are not concerned.
     Survey Methodology
     The Wealth and Values Survey was commissioned by PNC to identify
 attitudes about wealth among high-net-worth individuals, how it affects
 their lives and their needs in managing wealth. The survey was conducted
 online within the United States by Harris Interactive(R) in September and
 October 2007 among a nationwide cross section of 1,509 adults (age 18 or
 over) with annual incomes of $150,000 or above (if employed), at least
 $500,000 of investable assets (unless retired) or at least $1 million of
 investable assets (if retired).
     The total sample contains four distinct groups: 610 with assets of
 $500,000 to $999,999; 668 with assets of $1 million to $4.9 million; 120
 with assets of $5 million to $9.9 million; and, 111 with assets of $10
 million or more. Figures for age, sex, race, education, region, income,
 asset level and propensity to be online were weighted where necessary to
 reflect the composition of the wealthy adult American population. Findings
 are significant at the 95 percent confidence level with a margin of error
 of +/- 2.5 percent.
     The survey was designed and managed by HNW, Inc. (www.hnw.com), a
 leading provider of wealth marketing software and solutions to financial
 services companies and intermediaries seeking to capture and serve the high
 net worth market.
     An online media kit containing survey highlights and background
 information is available on PNC's website at
     The PNC Financial Services Group, Inc. (www.pnc.com) is one of the
 nation's largest diversified financial services organizations providing
 consumer and business banking; specialized services for corporations and
 government entities, including corporate banking, real estate finance and
 asset-based lending; wealth management; asset management and global fund
     This report has been prepared for general informational purposes only
 and is not intended as specific advice or recommendations. Information has
 been gathered from third party sources and has not been independently
 verified or accepted by The PNC Financial Services Group, Inc. PNC makes no
 representations or warranties as to the accuracy or completeness of the
 information, assumptions, analyses or conclusions presented in the report.
 PNC cannot be held responsible for any errors or misrepresentations
 contained in the report or in the information gathered from third party
 sources. Any reliance upon the information provided in the report is solely
 and exclusively at your own risk.

SOURCE PNC Wealth Management