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Few wealthy investors deployed cash in meltdown, UBS Survey says

Of the high-net-worth investors, 68% believe now is a good time to buy equities, though 80% are keeping their cash holdings unchanged

Joanna Ossinger | Bloomberg 

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Only about 10 per cent to 15 per cent of investors took advantage of the recent pullback to boost their equity allocations or put cash to work, according to UBS Group AG.

“We believe that this bull-correction provides an opportunity,” Michael Ryan, Americas chief investment officer, and Justin Waring, Americas investment strategist, wrote in a report discussing a of more than 1,000 and business owners. The survey was taken the week of Feb. 5, in the middle of the meltdown.


“For investors that have been on the sidelines waiting for a pullback to find a better entry point, this is a good opportunity for accelerating dollar-cost averaging programs,” they said.


Of the high-net-worth investors, 68 per cent believe now is a good time to buy equities, though 80 per cent are keeping their cash holdings unchanged, according to the report dated Feb. 14. And 80 per cent think are entering a period of higher volatility, though 84 per cent say the dip was temporary and not indicative of a recession.


Some Bullishness
One place where there was a notable move: bullishness about stock-returns in the next six months, which dropped to 43 per cent in February from January’s 74 per cent. Optimism about the economic outlook took a hit, too, falling to 58 per cent from January’s 72 per cent. Still, 86 per cent of the high-net-worth investors believe economic fundamentals are strong.


The top three threats to financial well-being seen by the high-net-worth investors were the political environment in Washington (64 per cent), the size of the national debt (58 per cent) and rising health-care costs (51 per cent).


Like wealthy investors, business owners still retain some bullishness -- with 74 per cent saying the dip is temporary, 62 per cent asserting now is a good time to buy equities, and 76 per cent responding that economic fundamentals are strong.
However, their confidence is down -- optimism about business prospects in the coming year dropped to 66 per cent from 87 per cent in January.


Business owners are also tempering their actions, both in terms of expansion and contraction. In questions about planned actions, “increase hiring” fell to 24 per cent in February from 36 per cent in January, and “invest more in my business” halved to 22 per cent from 44 per cent in the prior month. Expected downsizing of the workforce also dropped, to 6 per cent from 14 per cent.


First Published: Sun, February 18 2018. 13:29 IST