The Biggest Risk Investors Face Is Getting Spooked, UBS Says

(Bloomberg) -- The biggest risk investors face in the rest of 2018 is letting their emotions spook them into selling stocks, according to UBS Wealth Management.

“By focusing too heavily on short-term risks and not enough on long-term growth, many investors often miss out on returns,” UBS strategists led by Mark Haefele, global chief investment officer of the wealth-management unit, wrote in a note.

Over a 10-year horizon, stocks have been almost 20 times as likely to deliver a positive return than a negative one, according to UBS. And two of the most-watched indexes prove the point: the S&P 500 Index is up 114 percent over the past decade and the Stoxx Europe 600 Index has risen 36 percent.

And as the economic cycle matures, most investors are unlikely to correctly time peaks and troughs, and end up losing profit compared with a buy-and-hold investor, UBS says. Despite the risks from elevated volatility, the wealth manager expects positive economic and earnings growth, which bodes well for equity markets.

©2018 Bloomberg L.P.