The Strategist

Lower your expectations: UBS top manager tells about investments in 2020

01/15/2020 - 10:07

The key to a successful investment in 2020 will be moderate expectations and willingness to get lower returns, said UBS Global Wealth Management Chief Investment Officer. He advises paying attention to dividends, 5G technology and gene therapy.

In 2020, investors should be prepared for lower returns on their investments, as well as for the fact that they will have to work hard to earn every dollar. This was announced at a conference in Singapore by UBS Global Wealth Management Investment Director Mark Haefele, Bloomberg reports. The agency notes that Haefele’s key idea is reminiscent of the principle of a happy marriage: "lower your expectations."

The pursuit of high returns has forced many companies to shift the balance of their portfolios towards stocks and direct investment, and this is one of the reasons for the growth of markets in January, the top manager explained. “Central banks flooded markets with liquidity, and this resulted in increase in your profitability. It just works that way,” Haefele said.

He recommended paying attention to dividend stocks and advised to monitor companies with higher profitability, low debt to equity ratio and lower volatility than indices. “A dividend strategy can bring additional income and help protect your portfolio,” he noted.

Haefele also advised investing in 5G technology and gene therapy, highlighting them as the main topics of the decade. He expects “huge investments” in fifth-generation mobile communications, especially in Asia. “In this sector, returns will be higher than global GDP growth,” he said.

UBS Global Wealth Management also noted the fact that investors are likely to face a decrease in return on investment in its forecast for 2020, recalls Bloomberg. The paper’s authors also drew attention to the fact that almost $ 11 trillion of loans worldwide have negative returns.