The deepest pessimism since the 2008 global financial crisis is among the ultra-wealthy investors who have favored cash over stocks lately as they factor in a major market downturn in 2023. more than 85% of the shares.

A rather bleak picture emerges from a related CNBC poll of the richest investors, meaning those with at least $1 million worth of stocks and securities in their portfolio. It turns out that almost half of them, namely 46%, have significantly increased the cash in their portfolio compared to its structure last year. In addition, 17% of respondents say they now have “much more cash.” The reason they’re turning to cash is because more than half, namely 56% of the ultra-wealthy, don’t factor in the S&P 500’s drop of at least 10% in the new year. About 30% of respondents are even more pessimistic, as they believe that the fall will be more than 15%. One of the poll’s findings is particularly impressive: when asked what they consider the biggest threat to their wealth, 28% of the super-rich said the stock market and stocks carry the most risk. It should be noted that the ultra-rich express the same pessimism about the course of the economy, as 60% predict that the economy will be “worse” or even “much worse” at the end of next year.

The last time the wealthiest investors expressed such pessimism was in 2008.

As CNBC points out, the last time rich investors expressed such pessimism was during the 2008 global financial crisis and the more than a decade recession that followed. George Wolper, president of Spectrem Group, which conducted the poll for CNBC, notes that the deep pessimism that grips the richest investors is caused by a combination of negative factors – inflation, rising interest rates and a looming recession. The combination of these destabilizing factors has convinced investors that an even bigger drop awaits them in the new year after an already difficult 2022, during which the S&P 500 lost a total of 18%. So, at least 1/3 of wealthy investors predict that investments will be unprofitable in the new year, whether it be stocks, bonds or another category of securities. The rest are still hoping for some return on their investments, but estimate it at best no higher than 4%. In this case, that would be the marginal return given that short-term U.S. Treasury yields currently exceed 4%.

Among the results of the survey, there is a gap between the older and younger generations of investors in their assessment of the situation. Young millennials born in the late 1980s-2000s have a fundamentally opposite view of the situation and express optimism. At a percentage of 81%, they predict that by the end of next year their investment will make a profit, while almost half, 46%, expect they will make a profit of 10%. In an attempt to explain the essentially antidiametric view of the situation, Wolper emphasizes that the millennial generation was born in a global economy with low interest rates and rising asset prices, in which a market crash is usually followed by a quick recovery. . In contrast, among the older generation, many remember the eras of soaring inflation and high interest rates in the 1970s and 1980s, when the S&P 500 fell for nearly a decade. “Millenials have never seen inflation,” Wolper notes, adding that “all their lives they have seen central banks manipulate interest rates, but they have never seen such an aggressive rate hike.”