UBS Wealth Management chief investment officer Mark Haefele has said that a recession is unlikely in 2019 but 18 to six months prior to one is the best time to hold stocks.
Speaking at the UBS Wealth Insights forum in Singapore, Haefele said, “You have to stay invested, whatever your risk tolerance can bear. The period of 18 months to six months before a recession is often when you get most of your returns because that’s when economies do strongly.”
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Haefele says investors should keep their money in stocks in 2019, regardless of the market turbulence that the year threatens.
An air of uncertainty hung over the finance world at the start of the year, owing to political turmoil on various fronts and a mass sell-off at the end of 2018, which saw global equities take a tumble, and triggered a rush to cash and low-risk-low-return investments.
Haefele says that the potential for growth is still there, his view of a recession in 2019 being unlikely echoes views of senior figures at Lloyds Private Bank and JP Morgan aired in December.
The UBS Wealth Management CIO has, however, noted that investors should diversify their portfolio as much as possible to avoid over-exposure to one particular market or sector.
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By GlobalData“It’s better to invest globally. People tend to concentrate on their own region and that gives them two kinds of over-exposure: overweight in a certain region, and also some regions tend to be overweight in certain sectors.”
Tan Min Lan, head of UBS’ Asia Pacific investment office, told CNBC they forecast that equity markets for the region will return 12% to 15% this year, citing positive growth rates and the US-China trade war easing.
UBS is the world’s largest wealth manager, with nearly $2.5bn assets under management.
