The Private Bank by Nevada State Bank releases research on investment portfolios of high-income households
Submitted by Carson Now Reader on Mon, 01/28/2013 - 12:59pm
LAS VEGAS – The Private Bank by Nevada State Bank released the fourth of its High Net Worth briefings today. The research prepared by local market research firm Applied Analysis was specific to changes in the income and investment portfolios of Nevada’s higher income households during the past several years. The report suggests that Nevada’s higher income households were overly exposed to real estate investment risk prior to the recession and have rapidly shifted assets into low-yield bonds, transaction accounts and certificates of deposit.
Russell Price, executive vice president of The Private Bank by Nevada State Bank, confirmed that the trends identified in the briefing were consistent with his experience during the past few years but suggested that it might be time for wealthy households to re-evaluate their investments.
“No one in their right mind is looking to go back and recreate the portfolios that existed in 2006 and 2007,” Price noted. “That said, 2013 is not 2008, 2009 or 2010. There are opportunities to increase asset productivity while maintaining a conservative level of risk. For those with a longer view and liquidity, distressed markets in and out of Nevada also provide a number of compelling opportunities.”
“The trends witnessed in Nevada are relatively consistent with those being reported nationally, added Jeremy Aguero, principal analyst with Applied Analysis and the managing researcher on the project. “However, Nevada’s impacts tended to be more extreme both on the way up and the way down.”
Key findings from the briefing also include:
• In Nevada, tax returns for those making $200,000 or more show that between 2006 and 2009, the average income dropped from $840,235 to $625,098, a 25.6-percent decrease. However, 2010 represented a turnaround year for high net worth individuals; those with high incomes reported earning $707,837, an increase of 13.2 percent from 2009.
• Although Nevada’s wealthy followed the rest of the nation into lower risk assets that provided interest payments, overall they earned considerably less from these investments as yields plummeted. In 2007, the average high income Nevadan had $60,721 in taxable interest. This decreased to $31,039 in 2010, a drop of 48.9 percent, in spite of the larger investments.
• Higher volatility stock assets appeared to pay more to Nevada’s wealthy households in spite of the national trend of the wealthy divesting themselves from stocks. Except for 2009, there was a steady increase in ordinary dividends paid to high net income Nevadans. In 2010, the average high net income household earned $75,227 in dividend income, a 42.1-percent increase over the $52,925 in 2006.
• Capital gains for high net income Nevadans continued to suffer in 2010, down to an average of $275,902 per household, off 35.2 percent when compared to 2006. This trend is consistent with the flight of capital from riskier assets like non-dividend paying stocks and into traditionally safer investments such as bonds.
The Private Bank publishes the “High Net Worth Report” monthly. Briefings are available on Nevada State Bank’s website at www.nsbank.com/HNWreport or by contacting The Private Bank directly at 702.855.4812.
About The Private Bank by Nevada State Bank
The Private Bank by Nevada State Bank provides a full range of personalized financial services, including deposit and lending services, wealth planning and investment management. The Private Bank by Nevada State Banks serves high net worth and high-income clients. The Private Bank by Nevada State Bank is an unincorporated division of Nevada State Bank that provides specialized banking services to significant net-worth clients. Nevada State Bank is a full-service retail bank that has been chartered by the state of Nevada and is insured by the FDIC.
About Nevada State Bank
Nevada State Bank, with assets of more than $4.1 billion, is the largest state-chartered bank in Nevada. A full-service bank with 52 branches statewide, Nevada State Bank offers a complete range of consumer, private and business banking services. It is a subsidiary of Salt Lake City-based Zions Bancorporation (Nasdaq: ZION), one of the nation's premier financial services companies. With affiliates in 10 Western and Southwestern states, 136-year-old Zions Bancorporation has assets of $51.3 billion. For more information on Nevada State Bank, call 702.383.0009 or access www.nsbank.com.
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