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No strategy assures success or protects against loss. Diversification does not protect against market risk. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.

 

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Parks Wealth Management

 

Office: (201) 689-2020

Fax:(201) 689-6850

 

216 East Ridgewood Ave 
Second Floor 
Ridgewood, NJ 07450

info@parkswm.com

Check the background of this firm on FINRA's BrokerCheck.

Weekly Perspective

December 2, 2019

What makes a  billionaire a billioniare?

During the five years through the end of 2018, the population of billionaires around the globe increased by 350 people to 2,101. The wealth of billionaires grew, too. After a 4.3 percent loss overall in 2018, billionaires’ wealth increased by 34.5 percent during the past five years.

According to The Billionaire Effect, which was released by UBS and PWC last month, three specific personality traits explain the success of many billionaires. It seems the typical exceptionally rich person is a smart risk-taker, focused on business, and determined to succeed. If that describes someone you know who has not yet reached billionaire status, perhaps it’s the industry. The only field where billionaire wealth increased during 2018 was Technology.

Women are becoming billionaires at a faster rate than men (46 percent versus 39 percent during the past five years), although there are still significantly fewer women (233) among the superrich.

Most of these exceptionally wealthy folks are found in Asia and the Americas:

• There are 754 billionaires in the Asia Pacific region with 436 in China.
• There are 749 in the Americas with 652 in North America.
• There are 598 in Emerging Markets, the Middle East, and Africa with 397 in Western Europe and 151 in Eastern Europe.

While personality traits may influence success, what really makes billionaires is the success of their companies. The report stated:

“Over the 15 years to the end of 2018, billionaire-controlled companies listed on the equity market returned 17.8 percent versus the 9.1 percent of the MSCI [All Country World Index (ACWI)], almost twice the annualized average performance of the market. Their companies are also more profitable, earning an average return on equity of 16.6 percent over the last 10 years, compared to the 11.3 percent of the MSCI ACWI.”

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