Preference for U.S. equities, U.S. high-yield credit and the U.S. dollar. Underweight for the euro and Swiss franc.
Watch Mike Ryan, CFA, Chief Investment Strategist, UBS Wealth Management Americas, Regional Chief Investment Officer for Wealth Management U.S., deliver the fourth-quarter investment outlook.
Given the relative success of quantitative easing at boosting the U.S. economy, the European Central Bank (ECB) is undertaking strong measures to help strengthen the Eurozone. However, the policies may prove more difficult to implement than anticipated, according to the Chief Investment Office Wealth Management Research (CIO WMR) in the latest UBS House View: Draghi's dominoes .
An anticipated domino effect
The first step is for the ECB to buy assets quickly through asset-backed securities (ABS). This could help repair Europe’s ABS market, but the question remains if the estimated EUR 100 billion purchase will be enough to have the desired impact. Even if sufficient asset purchases can be achieved, it doesn’t necessarily translate to much-needed increased lending activity. However, the ECB hopes that the asset-quality review of banks at the end of the year will help increase confidence in lending practices and, therefore, contribute to growth. These events are designed to lead to moderate inflation, which will help offset a potential deflationary cycle that prevents consumers and businesses from future spending and investment.
What should investors do?
CIO WMR continues to take a pro-risk stance with a preference for U.S. equities and U.S. high-yield credit in fixed income. In foreign exchange, CIO WMR is overweighting the U.S. dollar and the British pound and underweighting the euro and the Swiss franc.
This month’s edition of UBS House View also includes a special section on the impact of Fed policy decisions and specific asset allocations for U.S. investors, in the “In context” article from Mike Ryan on page 7.
To understand more about how these trends may impact your individual investments and strategy, connect with your UBS Financial Advisor or find a Financial Advisor.
Join us as Mike Ryan, Chief Investment Strategist for Wealth Management Americas, leads this fully interactive discussion featuring the latest on our market views and investment strategy guidance on the first Thursday of every month at 1:00 p.m., ET / 10:00 a.m., PT.
Next call: Thursday, November 6, 2014
U.S. dial in: 1-855-827-6587 (1-855-UBS-MKTS)
Verbal passcode: MARKET
Listen to the replay from our October 2, 2014 call:
Dial in: 1-888-203-1112
*The views expressed on the call do not constitute a personal recommendation or take into account the particular investment objectives, investment strategies, financial situation and needs of any specific individuals. They are based on numerous assumptions. Different assumptions could result in materially different results. We recommend that you obtain financial and/or tax advice as to the implications (including tax) prior to investing.
Products and services mentioned on these web pages may not be available for residents of certain nations. Please consult the sales restrictions relating to the service in question for further information. www.ubs.com
© UBS 1998-2014. All rights reserved.
Wealth management services in the United States are provided by UBS Financial Services Inc., a registered broker-dealer offering securities, trading, brokerage and related products and services. Member SIPC. Member FINRA. UBS Financial Services Inc. is also registered as a Futures Commission Merchant (FCM) with the U.S. Commodity Futures Trading Commission (CFTC) and offers brokerage services related to the execution and clearing of on-exchange futures and options on futures products. Member NFA
Notice for Non-U.S. Investors. Order Routing Disclosure. Statement of Financial Condition. Statement of Financial Condition- UBS FSI of Puerto Rico. Best Execution Statement. Loan Disclosure Statement. Account Sweep Yields. Advisory & Brokerage Services. CFP Board's Trademark Disclaimer. Important Information About Auction Rate Securities. Futures Commission Merchant (FCM) Information for UBS Financial Services Inc.