(Bloomberg) -- Wealthy investors remain bullish on the investing environment in 2014 and see the U.S. as the best place to put their money, according to a survey released today by Morgan Stanley.
Technology was the most popular industry, with 72% of respondents declaring it a good area to invest, New York- based Morgan Stanley said in a statement. Investors expect to end 2014 with 42% of their portfolio in stocks and 23% in cash, according to the survey.
The Standard & Poors 500 Index has fallen 3.4% this year, including declines in four of the past five days, after jumping 30% in 2013. The Federal Reserve is reducing stimulus efforts, while many emerging-market central banks are raising interest rates to stem a rout in their currencies.
When you have short-term volatility come into the market, you dont want to overreact to that, you want to stick to your medium-term plan, Greg Fleming, president of Morgan Stanley Wealth Management, said in a Bloomberg Television interview with Erik Schatzker and Stephanie Ruhle. Over the medium-term, the key for the U.S. equity market is what happens to the U.S. economy.
Morgan Stanleys brokerage division, which the firm bought full control of last year, has 4 million customers and $1.91 trillion in client assets. Higher equity prices and a growing deposit base prompted the company to boost its targets for the units profit margin earlier this month.
More than half the respondents said the U.S. would be a good place to invest in 2014, followed by China with 41%, according to the survey. Sixty-seven percent said the Middle East is a bad area to invest.
Still, 90% of those surveyed said they are somewhat or very concerned about the U.S. economy. Eighty-two percent are concerned about increased foreign conflicts, according to the statement.
Economists estimate the U.S. economy grew at an annualized 3.2% in the fourth quarter, and initial figures are set to be released tomorrow. While the Feds tapering of its monthly bond-buying program is a big risk and a unique risk, recent volatility in stocks isnt unusual, Fleming said.
These are blips that do occur, he said. People forget, you go through a fourth quarter where the S&P was up almost 10% in one quarter, and it was almost in a straight-line basis. This is more typically what youre going to see. You have to separate that from the medium-term.
Morgan Stanleys survey was conducted from October to December and interviewed 1,004 U.S. investors with more than $100,000 of investable financial assets.