Millionaires’ Wealth Fell $1.9 Trillion in 2002

Millionaires worldwide were $1.9 trillion poorer in 2002 as stock prices dropped for a third year, according to a report released recently by Boston Consulting Group Inc.

Since January 2000, people with assets of at least $1 million have watched their wealth erode by about $5.3 trillion, the company said in a report titled “Navigating the Maze.”

The Standard & Poor’s 500 index in the U.S. and Europe’s Dow Jones Euro Stoxx 50 index each declined by more than 20% last year. That cost Microsoft Corp. Chairman Bill Gates, Berkshire Hathaway Inc. Chairman Warren Buffett and 474 other billionaires $140 billion, according to Forbes magazine.

This year, however, is likely to be more stable, said Christian De Junack, the report’s lead researcher.

The S&P; 500 has climbed 23% since its 2003 low on March 11 amid optimism that consumer spending will help lead to a recovery in corporate profits. In the first half of the year, the S&P; 500 rose 15%, the biggest gain since the end of 1998.

Wealthy investors switched some of their money from equities into cash and bonds as stocks slumped, the report said. North America’s affluent held 43% of their assets in stocks and equity mutual funds at the end of 2002, down from 63% at the end of 1999. In December, Europeans had 37% of their money in stocks and equity funds, while the share was 28% in Asia and 15% in Latin America, De Junack said.

Profits at companies that manage money for the wealthy decreased 25% on average since 1999 as assets fell and clients demanded lower commissions and traded less, he said.

For its report, Boston Consulting surveyed more than 80 financial companies with total assets and liabilities of $5 trillion in North America, Europe, Asia and Latin America.