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Investors More Bullish Following Trump's Rise To Power - UBS Report

Josh O'Neill Reporter November 18, 2016

Investors More Bullish Following Trump's Rise To Power - UBS Report

The latest report from the Swiss banking group suggests a Trump presidency may not be all doom and gloom for investors.

Optimism among high and ultra-high net worth investors following the US election result is high, with more than half taking a bullish stance on stocks compared with 25 per cent beforehand, according to a report from UBS.

UBS Wealth Management Americas surveyed 1,200 investors with at least $1 million of investable assets, including 250 with more than $5 million, immediately before and after the election for its quarterly Investor Watch report.

Financial services industries across the world are currently immersed in speculation as to what changes a Trump presidency will bring once he officially takes over the White House in January next year. Many are anticipating more lax regulation and tax deductions, but views differ across the board. 

Earlier this week, the current chair of the US Securities and Exchange Commission, the country's most powerful financial regulator, announced she is stepping down at the end of President Obama's term, paving the way for a regulatory shake-up in Washington under new leadership.

Since the election, some 48 per cent of investors feel optimistic about the short-term economic outlook, up from 39 per cent three weeks earlier.

Optimism about Trump's impact on the stock market also spiked significantly following the positive market returns during the aftermath of his nomination.

Before the election, 25 per cent of respondents expected positive returns for the S&P 500 throughout the next six months if Trump won, whereas now, 53 per cent anticipate beneficial returns.

During the run-up to the election, half of investors moved to protect their money; 30 per cent increased cash, while a quarter shifted to a more conservative asset allocation and 23 per cent cut back on spending. Only 9 per cent increased their investments in the stock market.

Post-election, conservative allocation figures dropped to 15 per cent, while the number of investors planning to ramp-up investments in the stock market almost doubled to 17 per cent.

One-third of all investors, including 46 per cent of Trump supporters, expect their taxes to decrease during his presidency. Two out of three wealthy investors, or 66 per cent, believe that Washington is in need of disruption and that a Trump presidency will be a catalyst for change in the US, positive or negative.

"Investors felt very strongly about both candidates," said Sameer Aurora, head of client strategy for UBS Wealth Management Americas, adding: "The main thing now is not to make emotional, reactive decisions based on the election outcome. That's where a financial advisor can add a great deal of perspective." 

A recent global report from the Bank of America Merrill Lynch showed that global growth and profit expectations have hit a one-year high following Trump's rise to power.

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