A plunge in US stocks Monday cut the fortunes of the world’s 500 richest people by $114 billion as the optimism over tax cuts that fueled January’s gains gave way to worries about inflation.
Berkshire Hathaway Inc. Chairman Warren Buffett, the world’s third-richest person, was hardest hit, losing $5.1 billion, according to the Bloomberg Billionaires Index. Berkshire is the biggest shareholder of Wells Fargo & Co., which plunged 9.2%, the most in the S&P 500. Buffett, 87, was one of 18 billionaires in the Bloomberg ranking to lose more than $1 billion on the day. Facebook Inc. CEO Mark Zuckerberg’s fortune tumbled by $3.6 billion, the second-biggest decline.
Even Amazon.com Inc. Chief Executive Officer Jeff Bezos, the world’s richest person, wasn’t immune to the carnage. His fortune slipped $3.3 billion to $116.4 billion as shares of the retail behemoth fell 2.8%. Alphabet Inc.’s Larry Page and Sergey Brin each took hits of about $2.3 billion.
The rout followed more modest declines on Friday that erased $68.5 billion in wealth from the world’s 500 richest people.
Meanwhile, equity investors are in for a further stomach-churning down-draft, but it will pay off to stay the course, according to AMP Capital Investors Ltd.
“It’s likely the pullback has further to go as investors adjust to more Fed tightening than currently assumed,” said Shane Oliver, Sydney-based global investment strategist at AMP Capital, which oversees about A$179 billion ($141 billion). “The pullback is likely to be just an overdue correction, with say a 10% or so fall, rather than a severe bear market.”
Oliver forecasts equity returns will remain positive in 2018, despite greater levels of volatility. While the MSCI All-Country World Index is down about 3.6% from its record high reached Jan. 26, it remains up more than 3% since the year began.
