More than half of wealthy investors now
bullish on stocks, up from only 25% before the election
Key findings:
- The top 3 issues for investors in this election were the
economy, healthcare and national security. Trump outscored Clinton
on all three.
- Trump's positioning as a Washington outsider was critical to
his win. Fully 9 in 10 investors feel Washington needs shaking up.
Two in 3 believe a Trump presidency will be a catalyst for change,
either positive or negative.
- More than a third (36%) of investors did not always admit their
choice of candidate to friends and family, mostly because they
wanted to fend off arguments or avoid judgment.
UBS Wealth Management Americas (WMA) today
released its quarterly Investor Watch report, "In the market for
change," which shows increasing optimism among high net worth and
ultra-high net worth investors following the election of Donald
Trump as US President-elect.
UBS surveyed 1,200 wealthy investors
immediately before and after the election to determine changes in
sentiment and mindset. Since the election, 48% of investors feel
optimistic about the short-term economic outlook, up from 39% just
3 weeks earlier. This rise is driven by a sharp increase in
optimism among Trump supporters that outweighed a decline among
Clinton supporters.
Optimism about Trump's impact on the stock
market is also up dramatically after the positive market returns
post-election. Prior to the election, only 25% of investors
expected positive returns for the S&P 500 over the next 6
months if Trump won. Now, 53% expect positive returns.
UBS Investor Watch found that Trump’s
positioning as an outsider to the Washington establishment was
critical to his election. Nine out of 10 wealthy investors feel
Washington is in need of disruption, and two out of three (66%)
believe a Trump presidency will be a catalyst for change.
Additionally, investors demonstrated more faith in Trump’s ability
to address their top issues – the economy, healthcare and U.S.
national security – than Hillary Clinton.
"Before the election, we saw many investors
adopt a defensive stance, raising cash and moving away from
stocks," said Paula Polito, Client Strategy Officer of UBS Wealth
Management Americas. "With the election behind us, many investors
are looking ahead with a growing sense of optimism about the
economy and the markets."
Investor actions –
before and after the election
Before the election, half of investors moved to
protect their money. Thirty percent increased cash, while a quarter
(25%) shifted to a more conservative asset allocation or cut back
on spending (23%). Only 9% increased investments in the stock
market.
Post-election, the number of investors who plan
to shift to a more conservative allocation has dropped to 15%,
while the number of investors planning to increase investments in
the stock market has nearly doubled to 17%. Overall, four in ten
investors intend to make changes to their portfolios, mostly based
on their political preferences.
Many Trump supporters plan to increase
investments in the U.S. stock market (33%) and increase personal
spending (25%). Conversely, Clinton supporters are raising cash
(28%) and shifting to a more conservative allocation (27%). Of
those investors holding cash for a buying opportunity, the majority
(63%) are waiting for a market dip before reinvesting. Forty
percent are waiting for more clarity on Trump's policies.
Benefits and concerns
about Trump's presidency
Trump's supporters are most enthusiastic about
fewer regulations (73% highly optimistic), a greater sense of
national security (70%) and improved infrastructure (62%). One
third of all investors, including 46% of Trump supporters, expect
their taxes to decrease with Trump as president. If taxes are
lowered, many investors would increase investments (45%), spending
(28%) and charitable donations (30%).
For Clinton supporters, the biggest concerns
about Trump's presidency are uncertainty about what he will do in
office (87% highly concerned), the rest of the world viewing
America negatively (82%) and the potential for an economic
recession (56%).
Among all investors, Trump's temperament
remains a concern. They view his biggest potential mistakes as
engaging in personal attacks (60%), starting another war (58%) and
failing to accept criticism gracefully (46%).
Need for
advice
Going forward, 57% of investors with a
financial advisor plan to discuss the election's portfolio
implications with them. Specifically, investors want advice on
their overall asset allocation, financial planning and how Trump's
policy changes might impact them. One third of investors want
advice on reinvesting cash.
"Investors felt very strongly about both
candidates," said Sameer Aurora, Head of Client Strategy for UBS
Wealth Management Americas. "The main thing now is not to make
emotional, reactive decisions based on the election outcome. That's
where a Financial Advisor can add a great deal of perspective."
Among investors who have already discussed the
election with their advisor, the vast majority feel more confident
about their portfolios (84%) and less likely to make an
emotion-based financial decision (85%).
We invite you to read the full report here:
www.ubs.com/investorwatch.
About UBS Investor Watch
UBS Wealth Management Americas surveys U.S.
investors on a quarterly basis to keep a pulse on their needs,
goals and concerns. After identifying several emerging trends in
the survey data, UBS decided in 2012 to create the UBS Investor
Watch to track, analyze and report the sentiments of affluent and
high net worth investors.
Methodology
For this seventeenth edition of UBS Investor
Watch, we conducted two surveys, one pre-election and one
immediately after the election. In the pre-election survey, 1,294
affluent and high net worth investors participated from October
14-17, 2016. The core sample of 1,074 investors have at least $1
million in investable assets, including 250 with at least $5
million. We also included an oversample of 313 Millennials who met
the following criteria:
- Respondents ages 21 – 29 who have at
least $100,000 in household income or $100,000 in investable
assets; respondents ages 30 – 36 who have at least $250,000 in
investable assets.
In our post-election survey, 1,308 affluent and
high net worth investors participated from November 10-11, 2016.
The core sample of 1,057 investors have at least $1 million in
investable assets, including 195 with at least $5 million. This UBS
Investor Watch also includes an oversample of 285 Millennials who
met the same criteria as above. With 90 survey respondents, we
conducted qualitative follow-up interviews.
About UBS Wealth Management Americas
Wealth Management Americas is one of the
leading wealth managers in the Americas in terms of financial
advisor productivity and invested assets. Its business includes
UBS’s domestic US and Canadian wealth management businesses, as
well as international business booked in the US. It provides a
fully integrated set of wealth management solutions designed to
address the needs of ultra high net worth and high net worth
clients.
About UBS
UBS provides financial advice and solutions to
wealthy, institutional and corporate clients worldwide, as well as
private clients in Switzerland. The operational structure of the
Group is comprised of our Corporate Center and five business
divisions: Wealth Management, Wealth Management Americas, Personal
& Corporate Banking, Asset Management and the Investment Bank.
UBS's strategy builds on the strengths of all of its businesses and
focuses its efforts on areas in which it excels, while seeking to
capitalize on the compelling growth prospects in the businesses and
regions in which it operates, in order to generate attractive and
sustainable returns for its shareholders. All of its businesses are
capital-efficient and benefit from a strong competitive position in
their targeted markets.
UBS is present in all major financial centers
worldwide. It has offices in 54 countries, with about 34% of its
employees working in the Americas, 35% in Switzerland, 18% in the
rest of Europe, the Middle East and Africa and 13% in Asia Pacific.
UBS Group AG employs approximately 60,000 people around the world.
Its shares are listed on the SIX Swiss Exchange and the New York
Stock Exchange (NYSE).
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161117005403/en/
MediaFor UBS Wealth Management
AmericasPranita Sookai, +1-212-713-3379pranita.sookai@ubs.com
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