Daily Management Review

UBS Survey Finds Recent Market Crash Was Taken Advantage Of By Few Wealthy Investors


02/18/2018




UBS Survey Finds Recent Market Crash Was Taken Advantage Of By Few Wealthy Investors
An analysis of the markets by UBS Group AG shows that during the recent correctional phase in the market, there were only about 10 to 15 per cent of investors who had taken advantage of the low-priced stocks for enhancing their equity allocations or used cash to buy such shares.
 
“We believe that this bull-market correction provides an opportunity,” Michael Ryan, Americas chief investment officer, and Justin Waring, Americas investment strategist, wrote in the report by UBS. The report was based on a survey conducted on over 1,000 business owners and people with high-net-worth. The survey was conducted in the week of February 5 when the markets were amidst a meltdown.
 
“For investors that have been on the sidelines waiting for a market pullback to find a better entry point, this is a good opportunity for accelerating dollar-cost averaging programs,” they said.
 
according to the report, while about 68 percent of the investors with high net value were of the opinion that the period was ripe for purchasing equities, a very large section of them – 80 per cent, did not change their cash holdings and did not put their cash to use. Among all of the respondents, there were 80 per cent investors who believe that there would be high volatility in the market in the near future even while 84 per cent of the respondents believe that this market pulldown was just a temporary one and doe not in any way indicate the onset of an impending recession.
 
There was however one issue that saw some notable move. Investors believe that in the next six months, there would be bullishness in the returns from the stock market. This value had dropped from 74 per cent in January to about 43 per cent in February. There was a downfall in the optimism about the general economic outlook which fell from 72 per cent in January to 58 per cent in February. However, trust in the strong economic fundamentals was expressed by 86 per cent of the high-net-worth investors polled in the survey.
 
The political environment in Washington (64 per cent), the total amount of U.S’s national debt (58 per cent) and the rising costs for health-care in the U.S. (51 per cent) were ranked as the top three potential threats to the economic and financial well-being according to the high-net-worth investors.
 
Some bullishness was also found to be retained by business owners like the wealthy investors polled. There were 74 per cent business owners who believe that the recent downturn in the market is of a temporary nature while 62 per cent of them were of the view that the current phase is just right for the purchasing of equities. 67 per cent of the business owners asserted faith in the strong fundamentals of the economy.  
 
However, compared to 87 per cent in January, in February, 66 per cent of the business owners appeared to be confident about good prospects for business in the coming year.
 
(Source:www.bloomberg.com)






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