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UBS: Short-Term Optimism Inches Up Among HNW U.S. Investors

By Alex Padalka September 9, 2020

Wealthy U.S. investors are increasingly optimistic about the short-term prospects of the U.S. stock market and economy, but their long-term outlooks are dimming, rosy, according to a recent survey.

Fifty percent of high net worth investors expressed optimism about how they expect stocks to perform in the next six months, up from 44% in May and July and 30% in March, according to UBS.

The bank surveyed 947 people in the U.S. with at least $1 million to invest and 448 U.S. business owners with at least $1 million in annual revenue and at least one employee other than themselves. UBS fielded the survey from August 26 to 31. 

Asked about prospects for the next 12 months, 43% of affluent U.S. investors are optimistic about the U.S. economy, the survey results show.

However, when it comes to a five-year outlook, investor optimism continues to slip. While 79% of respondents in May, said they fely optimistic, 75% said so in July and 71% in August, UBS found.

Wealthy investors are also almost evenly split about who they’ll vote for in the U.S. presidential election in November, with 51% planning to vote for Joe Biden and 49% for Donald Trump, according to the survey.

More high net worth investors believe that Biden will do better than Trump when it comes to managing the Covid-19 crisis, foreign policy and healthcare, UBS noted. However, more investors said that they believe that Trump will do a better job than Biden on the economy and job growth.

Financial advisors, meanwhile, “have an opportunity to address the election impact on investors’ portfolios,” UBS says. But only 32% of investor respondents say they’ve already discussed such themes with their advisors; 32% say they haven’t but are considering it; and 36% don’t plan to at all, according to the survey.

As for Covid-19 and its economic impact, most wealthy investors believe it’s not over yet. Forty-two percent of investor respondents believe the health impact of the virus will last into 2021, compared to 17% who believe it won’t be over for years. Another 17% think it will end before 2021, while 14% believe the worst is already behind us and 10% remain unsure, UBS found. And 30% of investors believe that the financial impact of Covid-19 will last for years, compared to 27% who think it will last into 2021, 17% who believe it will be over before the end of the year and 15% who think the worst is already over, while 11% of UBS survey respondents say they’re not sure.

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