The number of wealthy investors who expect improving market trends over the short term more than doubled since Donald Trump’s victory at the polls, says UBS Investor Watch.
Before the election, only 25 percent of investors expected positive returns for the S&P 500 over the next six months. Now, 53 percent expect positive returns, according to the report, which is published quarterly by UBS.
Trump’s positioning as an outsider to the Washington establishment was critical to his election, says UBS. Nine out of 10 wealthy investors say Washington is in need of disruption, and two out of three believe a Trump presidency will be a catalyst for change.
Additionally, investors demonstrated more faith in Trump’s ability to address their top issues—the economy, health care and U.S. national security—than Hillary Clinton.
“Before the election, we saw many investors adopt a defensive stance,” says UBS. “Thirty percent increased cash holdings, while one-fourth shifted to a more conservative asset allocation or cut back on spending.
“Post-election, the number of investors who plan to shift to a more conservative allocation has dropped to 15 percent, while the number of investors planning to increase investments in the stock market has nearly doubled to 17 percent,” says the survey, which included approximately 1,200 people with at least $1 million in investable assets. About one-fourth of the respondents have $5 million or more in investable assets.
Of those investors holding cash while waiting for a buying opportunity, 63 percent are waiting for a market dip before reinvesting, while 40 percent are waiting for more clarity on Trump's policies.
Trump's supporters say they are most enthusiastic about fewer regulations (73 percent), a greater sense of national security (70 percent) and improved infrastructure (62 percent).
For supporters of Hillary Clinton, the biggest concerns about Trump's presidency are uncertainty about what he will do in office (87 percent), the rest of the world viewing America negatively (82 percent) and the potential for an economic recession (56 percent).
Fifty-seven percent of investors with a financial advisor plan to discuss the election's portfolio implications with the advisor.