What happened
A recent Goldman Sachs survey found that high-net-worth individuals are holding about 20% of their net worth in cash and cash equivalents, driven by market volatility and concerns about persistent high inflation.
The survey also revealed that nearly 40% of investors with $1-5 million in investable assets have invested in alternative assets, while for those with over $10 million, the figure rises to 80%.
UBS data indicates that high-net-worth individuals held about 2% of their wealth in gold in 2025 and plan to increase this to 3% in 2026, a 50% increase in allocation.
Why it matters
The Shiller CAPE ratio for the S&P 500 has exceeded 41, a level seen only once before in 155 years, signaling that stocks are historically expensive and a downturn may follow.
Rising Treasury yields, despite weak economic data, suggest markets are focusing on deficit concerns, which could lead to higher long-term rates and potential problems for other asset classes.
With over $8.4 trillion in U.S. government bonds maturing by year-end and record corporate bond issuance expected, the bond market's dynamics are a key risk to watch.
Key facts
Goldman Sachs survey: high-net-worth individuals hold about 20% of net worth in cash.
Shiller CAPE ratio for S&P 500 is above 41, a level seen only once before in 155 years.
UBS: high-net-worth individuals plan to increase gold allocation from 2% to 3% of wealth in 2026.
Robin Brooks, senior fellow at Brookings, says Treasury yields rising despite weak data is 'more worrying than it looks'.
What to watch next
Whether Treasury yields stay above 4.8%, which could cause 'major problems' for other asset classes, according to strategist Matt Maley.
The impact of upcoming bond maturities and record corporate issuance on market liquidity and yields.
If the Shiller CAPE ratio's historical warning leads to a market correction, as it has in the past.