The world’s richest individuals increased their investment in jewelry despite shrinking wealth levels. According to the National Jeweler Network the increase in jewelry investments is probably due to the fact that during a global economic downturn, jewelry has a greater chance of retaining their value.
Merrill Lynch Global Wealth Management and Capgemini released its 13th annual world report. According to the report the world’s population of high net worth individuals (HNWI’s) was down 14.9% in 2008 compared to the previous year. There was also a corresponding decline of 24.6% of ultra high net worth individuals (UHNWI’s) during the same period.
By definition high net worth individuals are individuals with net assets of at least US$1 million, excluding their primary residence and consumables. Ultra high net worth individuals are individuals with net assets of at least US$30 million, excluding their primary residence and consumables.
The total wealth of HNWI’s dropped by 19.5% to $32.8 trillion.
According to Daniel C. Sontag, president of Merrill Lynch Global Wealth Management, the decline has wiped out two years of robust growth and essentially we are back at 2005 levels.
In the Middle East the HNWI population fell 5.9% to 373,600 and their total wealth declined 16.2% to $1.4 trillion.
In the UK, there were 362,000 high net worth individuals, 131,000 less than last year.
However the HNWI financial wealth is expected to reach US$ 48.5 trillion by 2013 (annual rate of 8.1%). The Asian Pacific region is expected to pass the North American region by 2013.
In 2009 philanthropic giving was on the decline across the globe, especially in North America but increasing in the Asia Pacific region.
Overall the sales of luxury goods dropped worldwide. However HNWI’s increased their investment in gems, jewelry and watches in 2008 (In 2008 22% of their passion investment went to gems,jewelry and watches compared to 18% during the previous year).