A Look at Wealth for 2020
“How Will the Wealthy Fare in 2020?” is an exclusive report recently published by Wealth-X1 , a world leader in wealth information and insights. Understanding the impacts that affect the wealthy is obviously critical to luxury real estate as they shape the spending power and ultimately the decisions of the affluent.
The report may be surprising because, despite geopolitical uncertainty and inflamed economic growth, they predict that 2020 will be “a year of solid expansion for the world’s wealthiest individuals.”
Wealth-X forecast that the global wealthy population will continue to grow with the Very-High Net Worth (VHNW), whose net worth is valued between $5-$30 million rising quickly, but even more sharply among the Ultra-High Net Worth (UHNW) with wealth over $30 million.
The number of VHNW individuals rose over 10% in 2019 as compared to only 1% in 2018 and reflects a strong bounce back in asset wealth, partially due to the stock market performances and despite a slowing global economy.
This growth was not evenly distributed throughout the world though, with North America seeing the biggest increases in both numbers and collective net worth by around 15% – equivalent to a 40% global share. Asia and Africa also hit double digits, but the rest of the world saw moderate to stagnate results.
Both the US and Canada’s wealth creation were supported by stable economic conditions, good consumer spending and declining unemployment. However, as Wealth-X explains, the major increase in wealth portfolio truly came from booming equities, supported by a shift in the US Federal Reserve’s policy, which resulted in three interest-rate cuts. This influx of liquidity propelled North American stock markets to record highs with the S&P 500 closing the year up by 29%; the tech-heavy NASDAQ Composite Index up by 36%; and Canada’s TSX Composite Index 19% higher (in local-currency terms).