Research from Lloyds TSB Private Banking suggests that wealthy people are focusing too narrowly on investing in property and the stock market and may benefit from diversifying their investments.
The survey of 1,399 adults across the UK with over £250,000 in savings and investments found that only 15 per cent of respondents in Yorkshire hold corporate bonds, 18 per cent government bonds, nine per cent precious metals and four per cent foreign currency.
Excluding their main residence, 43 per cent of the wealthy Yorkshire investors surveyed had property investments, with average holdings of £369,445. Equities were also heavily favoured, with investors holding an average of £112,471 in stocks and shares.
Despite this reliance on property and equities, only 17 per cent of Yorkshire investors surveyed admit their portfolios are not well-diversified. Among those who said their investments are not well-diversified, the main reason given was that they are unsure about where else to invest (37 per cent).
Alan Flint, Head of the North Region at Lloyds TSB Private Banking, said:
Many investors are seeking potential returns by investing in equities, and while property is traditionally a more conservative play, it appears many wealthy Brits have increased their prime property allocation. However, it is important that people do not overexpose themselves to any one asset class in a way that may leave them vulnerable to potential market shocks.
Effective diversification and a long-term focus are crucial to maintaining an appropriately balanced portfolio, and investors should concentrate their efforts on asset allocation rather than focussing purely on picking individual stocks.