WILL THE RICH STOP BUYING???

The Wealth Report, a blog hosted on The Wall Street Journal’s website, brings up an interesting point about how wealthy clients choose to spend during an economic downturn.The prevailing argument in the industry seems to be that the wealthy are immune from downswings in the economy by virtue of their wealth. This may be true for the ultra wealthy, which is a minute portion of the population.

But as pointed out by the Journal, “A lot of luxury consumers are the leaders, the movers and shakers, the people with corporate responsibilities and the entrepreneurs….Their investment portfolios are taking a hit. They’re feeling the effect of the weaker dollar. They have a lot of questions about leadership in this country. You can’t pull stuff over on these people. They know what’s going on and they’re really very cautious.”

This makes sense, especially for the wealthy who earned their money versus inheriting it. Those who earned it are typically more cautious and conservative with their hard earned dollars.

But the ultra-wealthy are also in another class. The uber luxury brands, the highest end of the luxury market, should have enough gas and cache to ride it out.