If you are a billionaire or an investor with more modest means, looking for the best returns for your money is always the top priority.
The difference is a billionaire has a more strategic way of investing money and often looks to the long-term rather than speculate on instant profits.
To find out how the ultra-wealthy think about investments, TIGER 21, a group of the world’s richest billionaires has revealed where they stake their money for growth.
TIGER 21 has more than 600 members and to qualify, they must have at least $10 million available to invest.
The research reveals most are bears – investors looking ahead who are concerned about the markets but believe they will weather any storms.
A third are neutral about how markets are performing and a large minority (15%) are bulls – investors optimistic that the markets will keep rising.
How they diversify their investments shows little movement over the past three years.
The split is roughly 10% in cash; 10% in fixed income; 22% in public stocks and shares; 5% in hedge funds; 20% in private equity and 26% in real estate. The balance goes into a mix of currencies, commodities and other investments.
These miscellaneous investments include cryptocurrencies and other alternative investments, such as cybersecurity and the burgeoning cannabis market in the USA and for medical research.
“These investors don’t have to create the demand for cannabis: It already exists,” said a TIGER21 spokesman.
Property under attack
“It just has to shift from what’s illegal to what’s increasingly legal.”
Although the table below shows small swings in asset allocation, there is a trend to switch out of real estate in favour of public equities.
TIGER21 says investors are feeling the pinch from retailers quitting shopping malls and out-of-town parks under an assault from online retailers such as Amazon.
Fixed income varies with interest rate fluctuations and is expected to rise as central banks hike their rates over the coming years.
Chart: where the money goes