Wealth Inequality = Investment Opportunities
The Occupy Wall Street movement shined a light on growing inequality between the middle class and the top 1%. The wealth inequality is real and getting more pronounced. In 2019, Elizabeth Warren tweeted that the top 0.1% has as much assets as the bottom 90% of the population. That seemed far-fetched but Politifact found the claim to be mostly true.
I recently saw an article in the Los Angeles Business Journal ranking the wealthiest Los Angelenos. Number 48 on the list was a billionaire…and that is just in Los Angeles!
Ultra High Net Worth is considered households with over $30 million in assets including home equity. There are over 240,000 such households in the United States and this group’s wealth has been surging over the past decade.
Globally, The wealthy are also getting wealthier.
Is this a problem?
Wealth inequality may be a problem from a societal perspective, but it also creates investment opportunities.
What asset classes are going to benefit in the future from growing wealth at the top? Beachfront real estate, NY City real estate, exotic cars, expensive watches, art and collectibles are all surging in value along with the wealth of those who buy such assets.
What stocks can you buy that benefit from growing affluence? Louis Vuitton (LVMUY), Richemont (CFRUY), and Tesla (TSLA) are a few investable luxury brands. To a lesser degree, Apple, Disney, and Hain also tie in well with this investment theme.
Don’t feel bad if you do not have $100 million. I realize that most unhappiness is caused by comparison (or maybe by just being too young). A study once concluded that peak happiness is when you are doing just a bit better than your neighbor. I am not sure how much your neighbor has, but the median net worth of Americans between 65 and 74 years old is about $266,070 (2019) and the median net worth of Americans with a college degree was $308,800. So, if you are reading this article, there is a good chance you are rich by most definitions.
So, congratulations on being rich, even if it doesn’t always feel like it.