Rich Investors Are Still More Likely to Buy the Dip Than Sell It

(Bloomberg) -- Almost a third of high-net-worth individuals would add more to their existing investments if markets declined further, while only 20% would reduce their exposure, according to UBS Group AG. 

Beyond those ready to buy the dip, another 30% would shift to different sectors while 18% would make no changes if markets kept going down, according to survey of more than 2,500 investors with at least $1 million in assets by the wealth management unit of the Zurich-based bank.

The survey suggests that many investors are undaunted at a moment when global financial markets are whipsawing as central banks prepare to tighten monetary policy at the fastest pace in decades to address high inflation. The S&P 500 Index fell on Monday to the lowest level in about a year and has tumbled about 12% so far in 2022, while the Bloomberg Global Aggregate Bond Index is also down almost 12% year-to-date.

“We’re seeing investors who are concerned and maybe in wait-and-see mode, but not panicking,” said Jeff Scott, head of client insights at UBS Global Wealth Management. “There isn’t a lot of jumping into the market, but nor do we see a lot of people pulling out.” 

Geopolitical risks from Russia’s invasion of Ukraine are the top concern of investors and business owners globally, according to the survey. That’s in part because of the war’s connection to several other economic issues, including inflation, which was respondents’ second-biggest worry. 

After an almost two-year period in which stocks only seemed to go up, millionaires are indicating they want some investing advice. In the U.S., 85% of those surveyed said they want more guidance than usual from their financial advisers, up from 78% in February.

UBS conducts its survey of investor sentiment every quarter. The global sample spanned 14 markets, including Brazil, China, Germany, the U.K. and U.S. 

©2022 Bloomberg L.P.