Investors waiting for right moment to invest amid inflation anxiety, finds UBS survey

Feb 08, 2022
Tech and healthcare sectors viewed as promising, say respondents

Investors are holding a significant amount of cash and looking out for opportunities to invest amid continuing anxiety over inflation, according to a survey of high-net-worth individuals and employers by UBS.

The research, which polled 3,000 investors and 1,200 business owners, finds two thirds have at least 10 percent of their portfolio in cash, while almost half are ‘waiting for the right opportunity’ to put funds to work, with technology and healthcare viewed as the most attractive sectors.

‘With the effects of Covid-19 expected to impact the healthcare industry for years to come and a shift to a more digitalized world, investors see further opportunities in these sectors,’ says Iqbal Khan, president of UBS Europe, Middle East and Africa and co-president of UBS Global Wealth Management (pictured), in a statement.

‘Given high levels of inflation and interest rate hikes on the horizon, however, investors are waiting for the right moment to put their money to work.’

Stock markets have started 2022 on the back foot with major indexes like the S&P 500 and Nasdaq 100 falling back, dragged down by surging inflation and expectations for significant rate hikes by central banks.

Timing questions

The pullback in stocks, especially previously high-flying tech names, has left many investors wondering whether now is the right time to put funds to work or whether further declines are likely, with the standoff between the West and Russia over Ukraine also concerning markets.

Investors are worried by rising prices and expect inflation to stay elevated for more than 12 months, adds the UBS research. Economic optimism is trending downward but investors still say they are ‘confident’ about the stock market over the next six months.

On a regional basis, 82 percent of US-based investors want the US administration to make controlling inflation a key priority, while worries about tax increases have declined, reports UBS. In Europe, investors are less positive on the stock market than in the previous surveys, with 43 percent expecting to invest more in the near term.

The investors who took part in the survey have at least $1 mn in investable assets, notes UBS.

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