Why Wealthy Households Believe In the Market Rally

Building Bullishness

It’s been a banner year for the stock market, with all three major indexes reaching fresh record highs in 2024. The S&P 500, the broadest measure of the U.S. stock market, is up nearly 18% in the year to date.

And at least one demographic believes that the momentum will continue in 2025.

Hopping On the AI Train

Roughly 97% of wealthy families expect their portfolio returns to be positive over the coming year, a slight uptick from 95% last year, per a Citigroup (C) survey of 338 family offices.

The meteoric rise of artificial intelligence technology has been a key catalyst for the stock market in recent years. Roughly half of the wealthy families surveyed reported exposure to AI investments, and a quarter of those who did not were strongly considering changing that.

In general, wealthy families are deploying more funds toward riskier and alternative assets, per the findings, as fixed income investments stand to lose some of their appeal as the Federal Reserve is lowering interest rates.

What Does This Mean?

The investment realities are different for families as wealthy as the ones cited in the Citi report. Not only might they have more money to put to work, they also likely have professionals managing their investment choices. That’s not the case for all Americans.

And yet, the survey reminds us of some important investment truths. Investing for the long-term stands to generate returns over time, and may allow you to catch a rally along the way. It’s also not necessary to pick stocks to gain exposure to a theme, such as AI. Exchange-traded funds (ETFs) can help investors put their money in a basket of securities that may follow a certain theme.

You don’t need to be ultra-wealthy to start your investing journey. Read more here.

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