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High-Net-Worth Investors Expecting Volatility, Economic Growth Under Trump

Dec 2016 by Caroline Rasmussen

The latest pulse poll of our high-net-worth investor network reveals broadly positive sentiment, with 63% of respondents expecting a boost to economic growth under a Trump administration. This is consistent with several other HNW surveys taken contemporaneously after Trump’s surprise victory. Broker-dealer TD Ameritrade polled 306 independent firms between November 14 and December 5 for its latest RIA survey and found that 15% of RIAs were “very optimistic” about the U.S. economy, a significant jump from a year earlier when just 4% were highly optimistic. 1  Similarly, 53% of 1,200 wealthy investors surveyed by UBS Wealth Management are looking forward to gains from the S&P over the coming six months. 2

This optimism, while in stark contrast to expectations going into November 8, is clearly supported by the remarkably bullish performance of public equity markets since the election. Stocks have rallied sharply since Trump’s victory, with all major US indices setting all-time highs since November amid hope that deregulation, lower taxes and increased government spending will stimulate growth and inflation.

Few have been willing to sit on the sidelines with equities on a tear, despite widespread consensus that the markets will see more volatility under a Trump administration. Sixty-nine percent of respondents in our latest survey expect higher volatility over the next 12 months, a view shared by many in the asset management community who have noted that more extreme outcomes, both to the upside and downside, are likely under Trump.

Confidence among high-net-worth investors specifically may also be linked to expectations around the new President’s tax policy, which as articulated to date would meaningfully drop the highest personal tax rate, slash corporate taxes and eliminate the estate tax, an approach that has been described by the New York Times as making it "much easier to amass dynastic levels of wealth." 3 Eighty-two percent of our network anticipates more favorable tax legislation under Trump, as do one third of wealthy individuals polled by UBS Wealth Management. 4

Click here for full results from our post-election survey.

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(1) TD Ameritrade: Advisors Most Optimistic in Six Years, Financial Advisor IQ, January 10, 2017, Murray Coleman.

(2) Wealthy Clients Confident after Election: UBS Survey, Fundfire, November 18, 2016.

(3) Trump’s Changes to the Tax Codes May Encourage Dynastic Wealth, New York Times, November 11, 2016, Paul Sullivan.

(4) Wealthy Clients Confident after Election: UBS Survey, Fundfire, November 18, 2016.


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