The recent asset allocation report from Tiger 21, a network of ultra-high-net-worth investors and entrepreneurs, revealed that more than half of its members are not invested in Nvidia. Specifically, 57% of the members have chosen to stay away from the chip darling, citing concerns about the company’s long-term growth potential. This indicates a cautious approach to investing among the ultra-wealthy, who may be wary of high-flying tech stocks.
Many Tiger 21 members have expressed reservations about investing in Nvidia, despite its current position as the leader in AI technology. The report suggests that some members believe that no company’s growth lasts forever, and that competitors often catch up, leading to a recalibration of the market. This reflects a broader sentiment within the group that is focused on wealth preservation rather than chasing high returns.
Interestingly, the report also highlights the fact that some members have chosen to avoid technology altogether, opting instead for investments in real estate or other sectors. This reflects a diversification strategy among the ultra-wealthy, who are looking to spread their risk across different asset classes. By allocating their portfolios in this way, members are aiming to reduce their exposure to any single industry or stock.
The report indicates that some Tiger 21 members are wary of the risks associated with tech investments, particularly the heightened volatility of the sector. The recent market sell-off, which saw Nvidia’s stock tanking 9.5% overnight, has only served to reinforce these concerns. Despite its impressive growth, some members remain cautious about the long-term sustainability of Nvidia’s success in the face of increasing competition.
Despite the reservations about specific tech stocks like Nvidia, Tiger 21 members remain optimistic about the wider AI industry. According to the report, AI is seen as one of the most investible themes in financial history, suggesting that members may be looking to capitalize on the potential of this emerging technology. While some may be avoiding individual tech stocks, the interest in AI as a sector remains strong among the ultra-wealthy.
The report also sheds light on the asset allocation strategies of Tiger 21 members. Real estate takes up 26% of their portfolios, despite high interest rates, indicating a continued interest in this traditional asset class. Public equities make up 22% of their allocation, suggesting a balanced approach to investing that encompasses both traditional and emerging sectors.
The asset allocation report from Tiger 21 provides valuable insights into the investment trends and strategies of ultra-high-net-worth individuals. By analyzing the reasons behind their investment decisions and their approach to diversification, we can gain a better understanding of how the ultra-wealthy are navigating the complex world of investing.