STATE’S TWO LARGEST METRO AREAS DIFFER SUBSTANTIALLY ON SOME ECONOMIC CONCERNS

CALIFORNIA, JANUARY 31, 2014—A very favored view of the technology sector, a strong willingness to invest in the U.S., and a growing concern about California’s financial future are among the similarities Bay Area and Los Angeles high net worth (HNW) investors share, according to Morgan Stanley Wealth Management’s latest Investor Pulse Poll.

“San Francisco and Los Angeles area residents love to fight over sports teams, land use and other cultural pastimes, but their investment temperaments can be very similar at times,” said Garry Whitfield, a Morgan Stanley Financial Advisor based in the Bay Area. 

"Comparing the poll results from California's two largest metro areas is compelling, because we see a diverse cross-section of views from across the state," said Alan Whitman, a Morgan Stanley Financial Advisor based in the Los Angeles area. "LA and San Francisco seem to be in lock step on some issues, but on others, we see some stark contrasts that should certainly factor into our thinking about what's going on in California."

Key Similarities 

Los Angeles and Bay Area respondents’ favored investments in 2014:

Technology (73% for LA and 76% “favored” for Bay Area)

Bio-technology (65% and 69%)

Pharmaceuticals (64% in both regions)

Energy (63% and 56%)

Communications (59% and 49%) 

Los Angeles and Bay Area respondents’ disfavored investments in 2014: 

General obligation non-revenue bearing municipal bonds (17% “favored” for LA vs. 10% for Bay Area)

Bond funds (16% vs. 22%)

Revenue bearing or project-backed municipal bonds (18% vs. 28%)

Municipal bonds in California (17% vs. 26%)

Corporate bonds (17% vs. 23%)

Federal government bonds or treasuries (28% vs. 23%)

Regional Preferences 

More Bay Area HNW investors regard the U.S. as a good investment for 2014 compared to other countries/regions. Fully 63% of the Bay Area investors hold that opinion—11 points above the national average

Los Angeles HNW investors are positively inclined toward investment in the U.S.: 62% of the Los Angeles investors regard the U.S. as a good investment for 2014—10 points higher than the comparable national average

Compelling Disparities

While Los Angeles and Bay Area investors had similar views pertaining to many economic factors surveyed by the poll, other areas showed a stark contrast between California’s two largest metropolitan regions:

Investor Concerns

While 77% of Bay Area investors were concerned about Social Security for their respective generations, only 59% of Los Angeles investors shared the same concern

75% of Bay Area investors were concerned about California’s fiscal well-being; but a substantially higher (84%) of Los Angeles investors were concerned about the state

Good and Bad Market Sectors

Bay Area and Los Angeles investors differed substantially on their view of the energy sector, with 56% of Bay Area investors calling it a good investment and 63% of Los Angeles investors sharing that sentiment

Los Angeles investors are more confident in the entertainment sector than Bay Area investors (34% vs 26%)