Millionaire investors stick with this market: Many are buying

A UBS survey of millionaire investors and business owners finds they recognize the risks shaking the market but are optimistic just a year out. In fact, a fourth of them would invest more.

When the going gets rough for the market — and it’s rough today — the well-to-do don’t sell out; in fact they often buy more.
That truism is reinforced by the May investor survey from UBS of 900 investors with at least $1 million in investable assets and 500 business owners generating $1 million or more in revenue each year.
Like most everyday investors, they are worried about political risks, the Ukraine war and inflation, and nearly as worried about the national debt and possible tax increases.

What wealthy investors are doing

So how would they invest if the market continues to fall — as it’s doing today, in what may be the worst market day so far in this rough year?

• 30% said they would shift money between sectors, something the market has already seen in a broad move from growth areas like tech to value stocks.
• 25% would stand pat, making no changes.
• 26% would add to their investments
• And only 19% would decrease what they have invested.

The survey also found 58% optimistic on the market and the economy over the next 12 months, and those numbers were rising.

Timing the market is the big risk

The key may be remembering that investing is a long-term project, and the market goes up over time. It can also go down — way down — for long periods, of course.
But the data suggests it’s best to ride things out than leave the market and try to jump back in at the right time. Missing only a few of the market’s best days can dramatically reduce your results.

A study from Bank of America last year, for example, found that while the market in the very rough decade ending in 2020 returned 18%, you’d have lost 33% if you were out of the market on the 10 best days. One decade earlier, the market returned 190%; miss the best 10 days, and your return shrank to 95%.
That’s why most investment advisors would likely tell you to stick to your strategy, perhaps move some money around, but stay invested. Even the pros with supercomputers don’t have much luck timing the market.

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