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World’s Ultra-Rich Preparing For Market Crash, UBS Warns

 

A synchronized global slowdown, with no end in sight, has spooked some of the wealthiest investors around the world, according to a new survey from UBS Wealth Management, seen by Bloomberg. UBS polled wealthy investors, who are preparing for a significant stock market correction by the end of next year.

S&P 500 Index, 2013-2021

S&P 500 Index, 2013-2021

- Click to enlarge

In the survey of more than 3,400 high net wealth respondents, 25% said they’ve sold risk assets, such as equities, commodities, and high-yield bonds, and have transitioned into cash. The synchronized global slowdown, coupled with a US-China trade war, were some of the greatest concerns of respondents.

“The rapidly changing geopolitical environment is the biggest concern for investors around the world,” said Paula Polito, client strategy officer at UBS GWM, in a statement. “They see global interconnectivity and reverberations of change impacting their portfolios more than traditional business fundamentals, a marked change from the past.”

Trade Price, 2016-2021

Trade Price, 2016-2021

- Click to enlarge

About 80% of the respondents expect volatility to increase through 2020, and 55% believe a market plunge could occur before Q4 2020.

Worse, 60% of respondents expected to raise cash levels in the coming quarters (i.e., sell stocks).

Most respondents said the added caution is due to a possible blowoff top in global equity markets. About 70% of respondents are optimistic through 2030.

Investors are optimistic about long term returns

Investors are optimistic about long term returns

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“The challenge is that they seem to want to respond” to short-term uncertainty “by really shortening their time horizons and shifting to assets like cash that are safe,” said Michael Crook, a managing director on the investment strategy team. Though with many of these people investing on a time horizon across decades and for future generations, that “seems like a mismatch.”

And while most respondents said they’re preparing for market turbulence in the short term, many should rethink their US outlook for the next decade. Teddy Vallee, CIO of Pervalle Global, shows that the “US is dead money for the next 10 yrs.”

Vallee suggests that today’s parabolic up moves in stocks could actually be blowoff tops, similar to what was seen in Nikkei 225 in late 1989/90.

 

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Tyler Durden
ZeroHedges' Tyler Durden is the hero of Fight Club, the 1999 movie based on Chuck Palahniuk's novel that reflected Chuck's experience in the Cacophony Society Quote: "Goddamn it, an entire generation pumping gas, waiting tables, slaves with white collars. Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need. We’re the middle children of history, man. No purpose or place. We have no Great War. No Great Depression. Our Great War’s a spiritual war… our Great Depression is our lives. We’ve all been raised on television to believe that one day we’d all be millionaires, and movie gods, and rock stars. But we won’t. And we’re slowly learning that fact. And we’re very, very pissed off." --> see more about Tyler on snbchf
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