Houston-area high net-worth investors are more bullish on the state economy and more skeptical of the national and global economy than the average U.S. investor.
According to a Morgan Stanley (NYSE: MS) investor survey, Houston’s local investor base is more optimistic than the national average — and more in love with Houston real estate than even the city’s dominant energy sector.
Besides real estate, Houston’s favorite industry sectors for investment include energy, natural resources, technology, biotechnology and pharmaceuticals, the survey said.
What does the survey tell us about Houston investors’ attitude toward energy?
The majority believe natural gas is really a leading category, and oil-related (investments) was just behind that. While we’re seeing potential in alternatives, alternative energy and renewable resources, there’s some belief that our data revealed that the typical investor believes that government regulation is benefiting alternative investments in renewable resources, (but is a) negative (factor) toward more traditional oil and gas.
Why are Houstonians more bullish on the local real estate market than investors in other cities?
The relative strength of the Houston and Texas economy, and the real estate market here in Houston clearly didn’t see the excesses we saw in other parts of the country. Recent data show at least a third of Houston investors think real estate would be their best-performing asset class over the next three years or so.
Houston investors are investing as much in fixed income and cash as in equities. What does that say about their attitudes?
Interestingly, what fixed income and cash holdings represent to some investors are safer havens, so when you add those together as safe-haven alternatives, it might indicate there’s a desire to preserve wealth as well. About 64 percent of Houston high net-worth investors are admitting that preserving their capital is more important than it was three years ago, so perhaps the rise in the market has driven a shift toward a little more defensive posture.
91%
The percentage of Houstonians bullish on the state economy, according to a Morgan Stanley survey
58%
The percentage of Houston investors who have faith in the national economy, versus 66 percent of all U.S. investors
76%
The percentage of Houston investors who favor energy, versus 64 percent for natural resources, 63 percent for technology, 57 percent for biotechnology and 51 percent for pharmaceuticals
20%
The percentage that energy investments make up in a typical Houston investors’ portfolio
88%
The percent of Houston investors who see potential in natural gas investments
Collin Eaton covers banking, finance and securities.
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