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How do investors feel about their money?

By Susan Tompor / Detroit Free Press
Published: November 08. 2012 4:00AM PST

It may, or may not, surprise you that, even after the economic recovery, those with money have more than a few worries, too.

First, some good news: Wealthy investors who saw a rebound in their own fortunes are more optimistic that the U.S. economy is on the rise, according to a PNC survey.

About 28 percent of affluent investors surveyed gave the economy a thumbs-up sign — a significant change from only 10 percent who felt as good a year ago.

More than half reported that their net worth has grown at least 20 percent since 2007, according to PNC’s seventh annual Wealth and Values Survey Investors’ Outlook.

And people sense better days ahead for real estate, too. About 36 percent are optimistic in this survey about the real estate market, compared with only 9 percent who were optimistic in 2011.

What could be even more telling: About 70 percent were pessimistic about real estate in 2011, but only 31 percent expressed such pessimism this year.

The others said they’re neither optimistic nor pessimistic.

Some of this makes a good deal of sense: The Dow Jones industrial average has shot up dramatically and more than doubled since hitting a low of 6,547.05 on March 9, 2009.

Housing appears to have hit bottom. Based on the latest numbers, housing prices rose 2 percent nationwide in August from a year earlier, the biggest gain since July 2010, according to the S&P/Case-Shiller index of property values in 20 U.S. cities.

Yet “it’s not quite the ‘Everything is fantastic’ story," said Thom Melcher, executive vice president and managing executive of Hawthorn PNC Family Wealth.

A couple of things are rattling around in people’s minds — mainly the world economy and what some fret about the “new normal."

Though wealthy people are optimistic, Melcher said, they’re also realistic about the limitations and threats ahead.

“They’re very worried about the global economy," he said.

While about half of affluent investors say they’re pessimistic about the U.S. economy, about two-thirds are pessimistic about the world economy, according to the PNC survey, which was conducted online in August and September. It involved 1,115 adults with more than $500,000 in investable assets.

Some other surveys show more upbeat attitudes — and some concerns about cash, too.

The Fall 2012 Merrill Edge Report, released by Bank of America, showed that mass affluent couples — consumers with $50,000 to $250,000 in investable assets — are more confident that they will meet their financial goals.

Alok Prasad, head of Merrill Edge, said the latest study marks a definite turning point. Levels of concern in such surveys had been getting worse, not better, for quite some time.

“There was a ray of optimism there worth noting," he said.

Melcher said what he found most interesting about the PNC survey is that five years after the beginnings of the financial meltdown, high-net worth investors say they believe they experienced a change in how they think about money.

About 88 percent say they believe it is “more important than ever to live within my means." And 3 out of 4 say they’ve developed a greater appreciation for nonmaterial wealth in their lives.

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