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Stay invested but expect stormier weather

The investment environment is likely to get more volatile in coming months, putting pressure on high net worth and ultra-HNW individuals to diversify against risk and be more choosy about where they deploy capital, according to UBS.

The Zurich-listed firm predicts that global economic growth will decelerate to 3.6 percent in 2019 from 3.8 percent, and company earnings will also slow down. On the other hand, the bank does not expect the world to tip into recession next year, and markets have already factored in a lot of adverse news. In late November UBS, whose total invested assets at its wealth arm stood at $2.39 trillion at the end of September, actually raised its overweight stance in global equities.

UBS argues that the bull market in stocks that has been in place since 2009 is moving into its late stages. Ironically, the strongest returns for equities can often be seen in the late stages of such a cycle, investment professionals at UBS told journalists at a briefing this week.

The bank is not alone in seeing an economic deceleration next year. According to the Organisation for Economic Co-Operation and Development, global gross domestic product is now expected to expand by 3.5 percent in 2019 and by 3.5 percent in 2020. Bank of America Merrill Lynch expects the S&P 500 Index to peak next year, and sees profit growth decelerating. On the other side of the Atlantic, UK-listed wealth manager Schroders has cut its 2019 global economic growth forecast to 2.9 percent from 3.1 percent. Citi Private bank, for example, has urged clients to protect portfolios against more volatility.

Read the full story at Wealth Briefing Asia. 
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