High-net-worth investors’ and business owners’ sentiment about the stock market and the economy has seriously eroded since the beginning of the year, yet their long-term outlook remains surprisingly robust, according to a new UBS Investor watch Pulse survey.
UBS polled 1,004 investors with at least $1 million in investable assets and 502 business owners with at least $250,000 in annual revenue and at least one employee other than themselves from March 21 to March 24. A poll it conducted two weeks earlier comprised 1,895 investors and 706 business owners, and another one completed Jan. 7 involved 915 investors and 500 business owners.
Investors’ sentiment toward the stock market plummeted from 64% who were optimistic in the January survey, to 35% in early March and 30% in late March.
Yet, 58% of investors planned to keep their portfolios the same in the next six months, while 31% said they would invest more and only 11% said they would invest less.
Thirty-four percent said now was a good time to invest, while 42% said they would wait until the market had dropped another 5% to 20%.
Fifty-nine percent of investors were pessimistic on the U.S. economy, up from 48% in early March and just 16% in January. However, long-term optimism remained high and unchanged from early March at 77%, and was up 11 percentage points from January.
Not surprisingly, COVID-19 was investors’ top concern in the latest poll, with 70% highly worried, up from 50% in early March. Concern about market volatility also shot up, to 59% from 46% in early March. Concerns about the political environment held steady at around 60%.
Ninety-eight percent of investors said the coronavirus had affected their lives in some way, up 25 points from early March.
Forty-six percent of investors expected the outbreak to subside by the end of June, while 33% said the end of December and 11% said it would go on into 2021.
Here’s how many investors gave a thumbs-up to various responses to the coronavirus outbreak in the U.S.:
- Centers for Disease Control and Prevention: 51%, highly effective
- State governments: 47%
- Trump administration: 39%
- Congress: 21%
Fifty-eight percent of business owners were still expressing optimism on the U.S. economy in late March, but this was down from 69% in early March and 75% in January.
Their outlook for their own businesses was steadier, with 66% expressing optimism vs. 71% in early March and 72% in January.
COVID-19 is now the biggest concern related to their business, said 69% of business owners, up eight points from early March. Seven in 10 reported that sales were down, up from 55% in early March.
Other concerns changed little if at all from early March: health care costs, 63%; the presidential election, 56%; taxes, 55%; and attracting customers, 54%.
Thirty-five percent of business owners said the COVID-19 outbreak would persist until year-end, but 51% were more optimistic, expecting it to subside by the end of June.
On a 12-month view, if the outbreak subsides, 32% of business owners said they planned to hire, while 17% said they would downsize.
— Check out Gundlach: Buckle Up for New Stock Lows, Long-Term Pain on ThinkAdvisor.