Wealthy investors plan to hoard cash if Biden wins election, UBS says

Wealthy investors plan to overhaul their investment portfolios regardless of who wins next week’s US election, with a so-called Blue Wave most likely to spur savers to sit on higher amounts of cash.

According to a UBS survey of 1,000 US investors and business owners with at least $1m in investable assets or annual revenue, 63% have already made adjustments to their portfolios ahead of the 3 November vote, with just over a third increasing their cash positions.

The survey revealed that should Democrat nominee Joe Biden triumph next week, the top priority among investors will be to increase their cash holdings, cited by 28% of respondents. Tax laws, national debt and regulation were the top three financial concerns investors cited under a Biden presidency.

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Conversely, if Donald Trump retains control of the White House, investors said their first response will be to increase allocation to company shares, with 29% of respondents opting for this approach. National debt, Covid-19 mismanagement and trade policies were the top concerns investors noted should Trump win.

The UBS survey also points to a split among investors over who they predict will win the US election, with 56% expecting Biden to beat Trump. However, 49% said they would vote for Trump, with just over half saying they prefer his approach for managing the economy, citing his regulatory approach as a top strength.

However, investors are displaying some anxiety about how the election result will be received, with 55% expecting Trump will contest the outcome and 53% predicting the US Supreme Court will need to step in.

Russ Mould, investment director at AJ Bell, the online investment platform, said the worst-case scenario for markets would be a contested result.

“President Trump’s combative stance on postal voting and his cry that he could challenge the election result bring back bad memories of the 2000 election, when George W. Bush and Al Gore wrangled over a recount in Florida, argued over ‘hanging chads’ and ultimately had to go to the Supreme Court to settle the matter,” said Mould.

“By the time the dust had settled, the S&P 500 had lost 12% of its value.”

To contact the author of this story with feedback or news, email David Ricketts

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