U.S. Investors Remain Resilient, UBS Survey Finds

The survey of about 1,000 U.S. investors with $1 million or more in investable assets—with 86% having assets up to $5 million—was conducted from March 21 to March 24, just two weeks after the firm conducted a similar survey of investors. 

The back-to-back research shows how the acceleration in the coronavirus pandemic sweeping the country has affected investor attitudes toward the markets and economy, although investors, as well as business owners interviewed in a separate UBS survey, are showing resilience in the face of the crisis. 

For instance, while 59% of investors are pessimistic about the short-term economic outlook—up from 48% in early March—and 69% expect a recession in the next 12 months—up from 46% in early March—58% don’t plan to adjust their portfolios and 31% plan to invest more, UBS found. 

Of those surveyed, 34% believe now is a good time to buy stocks, although 42% plan to wait until stocks fall another 5% to 20%. To the question of whether now is a good time to buy, another 24%, however, say “not now, it’s a bear market,” UBS said.

While most investors do expect the economy to take a short-term hit, 31%, nonetheless, are optimistic, likely because about 46% of those surveyed expect the crisis will subside by the end of June, says Jeff Scott, head of client research at UBS Global Wealth Management.

The survey also found that 77% of investors remain optimistic about the long-term economic outlook, a figure steady with the early March survey, and up from only 66% who were optimistic about the long-term in January. 

Still, 70% of investors are concerned about the coronavirus pandemic, up 20% from early March, and 59% are concerned about market volatility, up 13% since early March and 29% since January, the survey found.

Asked about the U.S. response to Covid-19, 51% said the Centers for Disease Control and Prevention was “highly effective,” 47% said state governments were “highly effective,” 39% said President Donald Trump’s administration was “highly effective,” and only 21% gave Congress top marks.

UBS separately surveyed 502 small business owners with at least $250,000 in revenue and one employee. About 31% of those surveyed had $1 million to $10 million in annual revenue, while 23% had more than $10 million. The businesses ranged from professional services to retail and e-commerce, technology and telecommunications, and healthcare and manufacturing.

Most of these business owners are optimistic, although they remain uncertain of what’s to come. Of those surveyed, 66% remain optimistic about the future. While that’s down from 71% who felt the same way in early March, “it’s still quite optimistic,” Scott says. 

Their perspective “does seem to be highly dependent on what happens with Covid-19,” however, he adds. “They seem to be taking this optimistic view that yes, it’s already hurt my business—70% say sales are down—but they view it as something that will last a few months rather than hurting their outlook for the whole year.”

While their hiring plans have dipped 4% since March, 33% of owners surveyed still plan to hire more workers and 48% plan to keep their workforce in place, up 1% since early March. 

Their perspective could change if the crisis drags on longer, he says. If the outbreak grows in strength, 35% plan to downsize vs. 19% that said they would downsize in late March. 

As of now, 51% of business owners surveyed believe the crisis will subside at the end of June, while 35% believe it will take until the end of December. 

In considering the response to Covid-19, both investors and business owners seem more focused on efforts to control the healthcare crisis than on efforts to support business. For instance, 71% of business owners support expanding hospital and care capacity, 70% support expanded testing, 66% support free medical care for the coronavirus, and 63% support enforcing shelter-in-place for 30 days.

“While there is support for business stimulus, it does seem like people are focused on reducing the spread and treating people who have it, and not as concerned about payout to individuals or businesses,” Scott says.