Investors poised to put cash to work once key issues addressed
Two-thirds of business owners plan to increase investment, and more than half plan to increase hiring
May 1, 2017 — NEW YORK–(BUSINESS WIRE)–UBS Wealth Management Americas (WMA) today released its quarterly UBS Investor Watch report, “On your mark…,” which found that since the election, a consistently growing number of investors across the political spectrum are optimistic about the U.S. economy.
Fifty-eight percent believe the administration will have a positive impact on the economy, up from 54% in December – even Democrats feel more positive than they did during the last survey.
The majority of investors (61%) are optimistic about the 12-month economic outlook. More than half of investors (56%) want to deploy additional capital, and anticipate more progress on key policy initiatives that they believe will jumpstart economic growth: infrastructure, taxes and another attempt at healthcare reform.
Among small business owners, who are also surveyed in the report, most are optimistic about an improved business environment (54%). As such, the proportion of business owners planning to invest more in their business and increase hiring is twice as high as those looking to invest less or downsize.
“It is encouraging that we continue to see optimism among investors and small business owners rising over time, as well as a willingness to put their capital to work,” said Paula Polito, Client Strategy Officer of UBS Wealth Management Americas. “Once investors start to see more progress on initiatives that boost the economy, it seems likely they will be further committed.”
- 61% of all investors are optimistic about the 12-month economic outlook
- 66% of investors are optimistic about the short-term outlook for stocks
- 91% of investors believe that investing in infrastructure will positively impact the economy
- 90% of investors believe that the U.S. government should spend more time coming up with a better healthcare solution
- 74% of investors think that government should focus on tax reform next
- 66% of small business owners plan to invest more in their businesses
- 56% of small business owners intend to increase hiring
Overall, investors tend to see the current investment climate as one with potential for high returns. Two-thirds (66%) feel optimistic about the short-term outlook for stocks. While confidence among Republicans and Independents has remained steady, sentiment among Democrats has jumped significantly and many investors have become more worried about missing out on market gains.
Investors are ready to capitalize on signs of additional progress from the Administration; prioritize healthcare, infrastructure and tax reductions
About half of investors (47%) approve of the job the administration is doing, but 61% want to see more stability from the Administration and 48% want more clarity on the government’s focus areas prior to investing. An equal percentage of investors (40%) are waiting for lower personal income taxes and more infrastructure spending. The U.S. economy remains investors’ top issue and, by and large, they expect government action.
Investors’ assessments of the administration differ by party affiliation: broken down, 77% of Republicans approve of the job done so far versus 24% of Democrats. However, investors from both parties agree on the three areas of priorities for the new administration. Nearly all investors (91%) believe that investing in infrastructure will positively impact the economy – particularly fixing American airports, per UBS’s recent infrastructure report – and three-quarters (74%) would like to see tax reform be the Administration’s next focus, but 67% are less optimistic about the potential results of tax reform based on the outcome of attempts at healthcare reform.
Healthcare is still a top concern. Nearly all investors (90%) think the government should spend more time coming up with a better healthcare solution, with 61% wanting the current Affordable Care Act revised, though they are willing to wait for a more thoughtful, effective alternative.
“Investors continue to be positive on the economy’s future, but continue to set the bar high for the Administration based on promises made during the campaign,” said Sameer Aurora, head of Client & Investor Insights for WMA. “Though a number of investors have tempered their optimism as a result of the recent healthcare bill situation, with the right moves, many investors still believe the Administration can achieve its goals and set the country on a path for growth.”
Small business owners continue making plans to invest and increase hiring
As with high net worth investors, the survey of small business owners found that they continues to feel positively about the potential for growth under the Trump Administration. Three-quarters of small business owners (75%) are optimistic about the outlook for their business in the next 12 months, with 54% highly optimistic about an improved business environment with fewer regulations – compared to 45% in December 2016 – and 49% highly optimistic about having a greater ease of doing business compared with 37% in December.
As a result of this optimism, 66% of small business owners plan to invest more in their businesses and 56% intend to increase hiring. These figures compare to the 31% who plan to invest less in their businesses and 29% who say they will downsize their workforce.
About UBS Investor Watch
UBS Wealth Management Americas surveys U.S. investors on a quarterly basis to keep a pulse on their needs, goals and concerns. After identifying several emerging trends in the survey data, UBS decided in 2012 to create the UBS Investor Watch to track, analyze and report the sentiments of affluent and high net worth investors. For more on investor watch visit www.ubs.com/investorwatch
For this nineteenth edition of UBS Investor Watch, 2,272 affluent and high net worth investors (with at least $1 million in investable assets) participated from March 28 – April 3, 2017, including 510 with at least $5 million. We also included an oversample of 383 business owners who have at least one employee besides themselves. With 90 survey respondents, we conducted qualitative follow-up interviews.
Notes to editors
About UBS Wealth Management Americas
Wealth Management Americas is one of the leading wealth managers in the Americas in terms of financial advisor productivity and invested assets. Its business includes UBS’s domestic US and Canadian wealth management businesses, as well as international business booked in the US. It provides a fully integrated set of wealth management solutions designed to address the needs of ultra high net worth and high net worth clients.
UBS provides financial advice and solutions to wealthy, institutional and corporate clients worldwide, as well as private clients in Switzerland. The operational structure of the Group is comprised of our Corporate Center and five business divisions: Wealth Management, Wealth Management Americas, Personal & Corporate Banking, Asset Management and the Investment Bank. UBS’s strategy builds on the strengths of all of its businesses and focuses its efforts on areas in which it excels, while seeking to capitalize on the compelling growth prospects in the businesses and regions in which it operates, in order to generate attractive and sustainable returns for its shareholders. All of its businesses are capital-efficient and benefit from a strong competitive position in their targeted markets.
UBS is present in all major financial centers worldwide. It has offices in 54 countries, with about 34% of its employees working in the Americas, 35% in Switzerland, 18% in the rest of Europe, the Middle East and Africa and 13% in Asia Pacific. UBS Group AG employs approximately 60,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).