Stocks and exchange traded funds (ETFs) plummeted in 2008 recording one of Wall Street’s worst years in history and has even taken its toll on the elite millionaires club.
Julianne Pepitone for CNN Money reports the following staggering facts:
- U.S. households worth $1 million or more, not including primary residencies, have seen their assets decline by 30%, and one-fifth of the asset declines were greater than 40%
- The majority of millionaires are worried that they will not be able to sustain their current lifestyles
- 90% of the survey takers stated that the economic downturn is here for a while, believing it will last another 22 months
- Stocks will need to post gains of 65% in 2009 to make up for losses and get asset levels back to pre-2008 levels
One of the major reasons that this elite group has been hit is the demise of the real estate market, an investment tool that made several investors very wealthy. Home prices posted an 18% annual drop in October and the S&P/Case-Shiller Index has posted losses for 27 consecutive months.
On one hand, the most devastating thing about this decline in assets and wealth is that this group is the bread and butter of generating jobs and getting the economic wheels churning.
On the other hand, there are plenty of opportunities to recover from this crisis. Millionaires or not, we recommend using the 50-day and 200-day moving averages to determine whether or not one should utilize an opportunity.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.