Amid political and economic uncertainties, such as Brexit, presidential elections in the US and France, and tensions in North Korea, a majority of millionaires globally find the current times the most unpredictable in history. However, the millionaires believe they can steer clear of the odds, according to a report by UBS Wealth Management.
In the UK, the percentage of millionaires believing the existing times to be the most unpredictable stood at a staggering 82%.
The study, which surveyed 2,842 millionaires across seven countries, found 68% of millionaires struggling with information overload and 72% getting distracted by short-term risks. Also, 71% of millionaires held the view that elected governments could only respond to short-term dangers. Even more think that public votes on emotions, not facts.
In the UK alone, almost three quarters of the affluent said that they are distracted by these short-term risks and unforeseen events and 66% said that they are suffering from information overload as they look to navigate the unpredictability. Moreover, 79% across this nation believed that elected governments could only respond to short-term dangers.
On the brighter side, millionaires were found to be optimistic about the future in terms of their personal financial situation and the wider economy, with 77% anticipating that they can accurately assess financial risks arising from the volatile environment. Also, 51% of the millionaires expected their finances to improve in the next 12 months, compared to 13% who thought otherwise.
Similarly, 57% of millionaires were found to be optimistic about achieving their long-term financial goals as against 11% who held contrasting views. In the current volatile landscape, three quarter of millionaires still believed cash to be a safe option.
In the UK, 54% of millionaires were found to be optimistic and confident about the future compared to just 12% who thought otherwise. Also, 85% of the millionaires said that are confident in their own ability to assess financial risks.
Majority of UK millionaires were also found to be confident of finding safe places to invest their money in the current volatile landscape, with 82% believing cash to be a safe option in spite of the risks of holding this asset.
A minority of the sample also believed that modern technologies such as artificial intelligence and big data could make the world more predictable.
UBS Wealth Management head of UK domestic Nick Tucker said: “After a year of Brexit, high profile shocks and global tensions, most believe we live in a very unpredictable age. Political, economic, societal and financial risks are all prominent in people’s minds.
“In response, we see evidence of short-termism creeping in, people reacting to each event as uncertainty grows. Investing on your own doorstep can be tempting in this climate. Holding onto cash can feel safer, even as it erodes your wealth in real terms.
“Although confidence remains high, neither approach is likely to work well in the long-term. In an unpredictable world, it remains best to look to the long-term, focus on your goals and invest in a balanced portfolio across a range of assets and locations.”