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World’s wealthiest preparing 2020 stock sell-off

By Lawrence Gash

Wealthy expecting significant volatility next year says UBS Global Wealth Management report

Worlds wealthiest preparing 2020 stock sell off

UBS Global Wealth Management has polled the world’s wealthiest investors and found that many are preparing for increased volatility next year and are limiting their exposure to risk.

55 per cent of the more than 3,400 high net worth individuals surveyed believe the market could plunge before Q4 2020 with 25 per cent admitting they have already sold risk assets, such as commodities, high-yield bonds and equities, opting instead to amass cash reserves.

This trend of selling stocks and sitting on cash is likely to continue with 60 per cent of those polled expecting raise their cash reserves in the upcoming quarters.

UBS found that these investor’s concerns were driven chiefly by the ongoing US-China trade war, troubled global equity markets and the general economic slowdown around the world. Almost 80 per cent of those polled expect volatility to increase in 2020.

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

Warren Buffett is perhaps the billionaire most known for currently holding cash. Only last week the value investor’s company Berkshire Hathaway increased its cash pile to $128bn.

A survey of UBS’ own advisors in the firm's recent Billionaires Insight Report found that: “Billionaires are making significant changes to their investment strategies.” It added that: Many have also sold businesses, and are planning to diversify their assets more widely. A third (33 per cent) of advisors say that billionaire clients have sold businesses through trade sales or IPOs in the last 12 months, with 30 per cent expecting them to do so in the next 12.”

FURTHER READING: Global billionaires up by 40 per cent in five years

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