UBS Wealth Management Americas’ latest investor survey finds that the current market mayhem reminds investors of what happened about eight years ago.
Of those polled, 42% say the volatility has “rekindled memories of the financial crisis,” according to UBS. Plus, nearly 25% believe it is signaling “the start of a longer-term market decline,” the bank explains.
UBS released the report, “The Conflicted Investor,” on Thursday, two days after it reported its fourth-quarter and full-year 2015 earnings. “The findings reveal a struggle between investors’ rational perspective and the emotional impact of the financial crisis,” according to a statement.
“On one hand, investors believe in the economic recovery — 79% say it has met or exceeded their expectations — and nearly half, 47%, wish they had invested more during the rebound. On the other hand, many investors still carry emotional scars from 2008 that have kept them from fully participating in the recovery.”
How many have turned to cash? Plenty.
The poll of more than 2,600 high-net-worth and affluent investors finds that close to 90% have kept or increased their cash holdings since the crisis, and fewer than 20% are willing to assume more risk for greater returns.
“Even before recent volatility tested their resolve, investors struggled to weigh the economic recovery and its positive effects on their finances against the lingering emotional fallout from 2008 and 2009,” explained Paula Polito, client strategy officer of UBS Wealth Management Americas, in a statement. “The financial crisis appears to have cast a long shadow on investors.”
Still, the survey finds that having an advisor makes a difference.
Almost all investors with a financial plans are more confident than their peers during times of market volatility: 98% say their plans “keep them on track,” while 97% state that their plans “help them stay focused on long-term goals, not daily market fluctuations.”
When asked how long the present volatility might last, slightly more than three-quarters, 77%, believe this trend is temporary. But nearly a quarter, 23%, state that it is a sign the U.S. is “on the verge of a longer-term market decline.”
What’s going on?
Most wealthy investors, 85%, say the volatility is driven by “so many factors it is too difficult to predict where markets are headed,” according to UBS.