Saudi's super-rich favour illiquid assets, says report

Kingdom’s wealthy say asset class helps avoids the urge to sell when markets fall

(Image for illustrative purposes only)

(Image for illustrative purposes only)

More than 90 percent of Saudi Arabia’s super-rich favour investment in illiquid assets to avoid the urge to sell when markets fall, a Barclays Wealth report said.

Some 96 percent of wealthy investors in the kingdom also report setting themselves financial deadlines, with 90 percent saying they prefer to delegate financial decisions to others to avoid the risk of “emotional trading”.

The poll, which surveyed more than 2,000 high-net-worth individuals (HNWI) around the world, found investors in the Gulf display better financial discipline than their counterparts elsewhere.

In the UAE, some 82 percent of investors polled said they delegate financial decisions, while more than three quarters said they believe buying and selling often will boost their returns.

In Qatar, 98 percent of HNWI said they were most likely to delegate financial decisions to others while 42 percent said they preferred to deal swiftly with bad investments.

They also favour strategically timed markets as opposed to adopting ‘buy and hold’ strategies, the report said.

Investors in Asia Pacific, particularly in Taiwan and Hong Kong, demonstrate the greatest desire for financial discipline while those in more developed markets such as Spain, Australia and the US show less, said Barclays Global.

Globally, 41 percent of wealthy investors wished they had more self control over their financial behaviour, the report said.

Those at the wealthier end of the spectrum - owning in excess $16.4m in assets – felt the greatest need for financial discipline with 45 percent of respondents wishing they had more self-control.

Globally, nearly a third of those polled (32 percent) said that trading frequently is necessary to get a high return, however these respondents are over three times more likely to believe that they trade too much. In total, almost half (46 percent) of respondents who believe one has to trade often to do well think that emotions force them to do this, said the report.

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Posted by: rey kardoso

The observation that Saudi super rich favor illiquid assets to avoid the urge to sell when markets fall is a very debatable ambiguous statement and does not at all make sense, in my humble opinion. There must have been a different perception captured by the surveyers. The aspect of delegation also may not be universally representative of this segment of super rich investors. On the contrary, many I know of, apply trading techniques and opportunistic deal making. While there may be delegations of the actual executions, the core strategy, preference, timings are very much reined in by the investors themselves. I challenge the barclays surveyers to reconfigure their sample size and mix and they will be surprised by the results!

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