NEW YORK, Oct. 28 (Xinhua) -- The top three issues bothering the U.S. investors are political environment, national debt and global trade tensions, according to UBS Global Wealth Management's latest quarterly investor sentiment survey.
Some 75 percent of U.S. respondents said market volatility from trade tensions concerned them, according to the survey.
As a result, while 59 percent of the investors surveyed kept to current investment plan, 23 percent were shifting more of portfolio to cash, 16 percent were seeking to rebalance currency exposure, 14 percent were selling stocks and 12 percent were adding hedges.
U.S. investors' optimism on their economy remained unchanged quarter over quarter. However, the proportion that expressed optimism on U.S. stocks dipped from 53 percent to 50 percent.
U.S. business owners were particularly cautious, with 31 percent planning to hire compared with 46 percent in the second quarter. Despite declining intentions to put money to work, cash holdings scaled back from 22 percent to 21 percent of portfolios.
As for the global picture, the survey, which polled more than 4,600 wealthy investors and entrepreneurs in 18 markets, saw confidence tick up at the end of the third quarter.
Fifty-three percent expressed optimism on the global economy and 61 percent on their own region's economy. Both figures were up two percentage points quarter over quarter. Fifty-six percent were bullish on their own region's stocks, up one percentage point.
However, 73 percent of global respondents said market volatility from trade tensions concerned them. As a result, 34 percent said they were shifting more money to cash - making this the most popular reaction to trade developments among respondents.
Cash holdings rose one percentage point to 27 percent of respondents' portfolios this quarter, much higher than the percentage typically recommended by UBS Global Wealth Management's Chief Investment Office.
This tempered optimism was also in evidence among business owners. Thirty-four percent said they were planning to hire new workers, down five percentage points. Forty-four percent said a global recession was highly likely in the next six months.
By contrast, UBS Global Wealth Management's Chief Investment Office saw a global recession as unlikely in the next two quarters, with strength in key areas like U.S. consumption offsetting weakness in manufacturing.
"Geopolitical concerns such as the global trade war are keeping investor optimism in check. There is a dichotomy in sentiment - investors are holding large cash balances in a wait-and-see mode, even though nearly 50 percent anticipate higher stock market returns in the next six months," said Paula Polito, client strategy officer at UBS Global Wealth Management.
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