How will the super-rich weather the recession? 1,200 $130 billion investors have a grand strategy — and it’s not playing the stock market

news7f01/04/2023

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How will the super-rich weather the recession? 1,200 $130 billion investors have a grand strategy — and it's not playing the stock market

The 1,200 super-wealthy members of the Tiger 21 network, including entrepreneurs, investors and executives, are “asset preservers”. in the words of Michael Sonnenfeldt, the president of the organization. Worth a combined $130 billion, this super-rich group knows better than most how to keep their massive fortunes.

So how does this group of investors build a recession-proof portfolio in the new year? As it turns out, the real answer is not to invest right now, as Tiger 21 members recently told Sonnenfeldt and the organization’s management that “Cash is king,” according to a survey of Tiger 21 is for Asset. Having enough liquidity on hand will help them “seize real estate opportunities in the next 9 to 12 months”.

Nearly 70% of members surveyed said they plan to invest in real estate by 2023, with multifamily units, medical facilities and storage considered as strong holdings. Meanwhile, office and retail facilities have been avoided.

In comparison, a recent poll of retail investors found that only one-third of amateur traders plan to invest in real estate by 2023, preferring stocks instead — specifically big tech stocks and green energy.

Other areas where the wealthy members of Tiger 21 plan to invest in the new year include technology, energy and healthcare.

See this interactive chart on Fortune.com

When it comes to stocks, Tiger 21 members all agree that the bottom has yet to be reached, even after investors debated a consistently, and often suddenly, the market stalls throughout 2022. Many say they are holding inexpensive index funds as part of their long-term strategy.

According to Sonnenfeldt, Tiger 21 members are also investing in smaller private companies “where they can leverage their own entrepreneurial skills” and feel more comfortable working with holding companies. The private portion is profitable or cash positive.

Cryptocurrencies ‘at the gold scale’

Despite a tumultuous year for crypto in 2022, many wealthy members of Tiger 21 have decided not to jump jobs and sell off their digital tokens.

A third said they have kept their crypto holdings the same over the past six months, while 10% have bought more. Half of the club’s members said they don’t hold crypto.

Meanwhile, 1 in 5 people said they plan to increase their crypto holdings in the first half of the year, with a quarter planning to maintain their crypto assets at the same level for the next six. next month. Only 4% plan to sell crypto.

“If you look at our Tiger 21 Membership in its entirety, crypto is roughly the size of gold,” said Sonnenfeldt — who described unregulated digital tokens as “a hedge.” uncertainty” for many members — said in a note next to the survey results at the end of December.

“People with fundamental faith in crypto will see this as a buying opportunity, but they are smart enough not to put more than a certain percentage of it into this to preserve their assets,” he said. long time”.

Gold is seen by many as a safe-haven asset, with investors pouring money into it during times of economic or political uncertainty.

Cryptocurrencies, on the other hand, are notoriously volatile. Last year’s crypto review, commonly known as Crypto Winter, remove trillions from the market this year, and cause a big retreat from venture capital investors who poured money into startups in the field last year.

However, Sonnenfeldt of Tiger 21 argues: “If you are worried about your country’s monetary and economic system, then you should invest in assets like cryptocurrencies and gold—especially for investors outside the United States.”

This story was originally featured on Fortune.com