High-net-worth investors’ optimism dipped to early-pandemic levels on continuing concerns about the economic and market effect of inflation and the war in Ukraine, according to the latest quarterly investor sentiment survey from UBS.
In the U.S., investors’ short-term optimism on the economy and stock market has plunged. Looking ahead to the midterm elections, wealthy investors’ top-of-mind concerns are the economy, health care, taxes and Social Security.
“In challenging times like this, it’s important that investors continue to seek expert guidance and perspectives to understand the environment and potential opportunities to support their liquidity, longevity and legacy needs,” Iqbal Khan, president of UBS Europe, Middle East, and Africa and co-president of UBS Global Wealth Management, said in a statement.
Business owner optimism, in contrast, has rebounded after the biggest drop in two years, with most business owners planning to continue to hire workers and invest in their businesses over the next 12 months. Nearly half of business owners expect to raise prices in the next six months, driven by rising materials costs and concerns over wage inflation.
“Business owners’ increased optimism and steady focus on hiring and investing in their businesses is an encouraging sign given the current market environment, as they are a key driver of the global economy,” Tom Naratil, president of UBS Americas and co-president of UBS Global Wealth Management, said in the statement.
“Thoughtful wealth management advice and solutions across business planning, portfolio diversification and exit planning will be critical for them as they navigate the market.”
UBS conducted its survey from July 5 to July 19 among 899 investors in the U.S. with at least $1 million in investable assets and 498 business owners with at least $1 million in annual revenue and at least one employee other than themselves. UBS’s May survey, conducted from April 5 to April 18, included 900 investors and 500 business owners.
For its global survey, UBS polled 2,864 investors and 1,129 business owners across 14 markets from June 29 to July 19.
Short-term optimism among Latin American investors has held up better than in the United States, with 53% feeling optimistic about the economy and the stock market in their region. Their optimism is driven by a sense of a return to normalcy, continuing strong consumer demand and potential opportunities to capitalize on dips in the market cycle.
Across Europe, optimism about the stock market and the economy among high-net-worth investors is down by 10 and 15 percentage points, respectively, from May levels to 50%. Europeans who say they are optimistic cite the strength in company earnings, employment and consumer demand.
In Asia/Pacific, optimism is holding steady and remains the highest across all regions with some 60% of investors feeling confident in the stock market and their economy. Investors in the region are interested in longer-term investment themes including energy security and smart mobility.
See the gallery for 12 U.S. investor sentiments about the economy and stock market and business owner sentiments about their organizations.