Opinions are divided over whether we’re really any closer to a return of the good times
Although there are some recent indicators which bode well for the luxury industry, like the Walpole-Ledbury research and evidence suggesting that the super rich are richer than ever other voices, including Robert Frank of the Wall Street Journal, are warning that the ‘rich recovery’ is stalling. Frank refuses to be blinkered to the other side of the story.
An expert on the American wealthy in particular, and author of “Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich”, the senior WSJ writer has been pedalling his cautionary tale since June, when he wrote about the ‘Paralyzed Plutocracy’ and examined five broadly psychological reasons for what he saw as a ‘financial lock down’ amongst the rich.
The stumbling blocks Frank highlighted back in June haven’t really been resolved and in fact there are some indications that confirm his dim outlook. A new survey from Phoenix Marketing International shows that whereas in April 30% of affluent investors were pessimistic about the US economy, that number has now risen to 52%. And the result is that the wealthy feel less inclined to invest their money – the number of millionaire investors planning net decrease in their portfolios has risen to its highest point since June 2009. The worry is that if this mood becomes pervasive, young businesses will struggle to find the finance they need and at a macro-economic level everyone will suffer at both a corporate and an individual level. As Frank puts it, “Rather the leading the recovery, the wealthy seem to be simply following the stock market. When it is up, they are up. When it isn’t, they freeze. That could make for a slow and volatile recovery…”
Admittedly, Frank’s analysis is based mostly on the American economy, yet overall the mixed messages currently circulating throughout the media suggest that the many signs of recovery should still be considered tenuous at best.
Wall Street Journal