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Key Words: The wealthy loaded up on stocks in March — now they’re selling, warns ‘fortress bank for billionaires’

Key Words

What’s a wealthy investor to do in this market?


‘We had record loans written during the middle of March and the middle of April, of significant family offices who asked us for balance sheet and then went into the market. They bought, for example, U.S. equities, but they didn’t buy $50 million. They bought a billion-plus of those equities to rebalance. And they made a lot of money.’

That’s Josef Stadler, UBS’s head of global family offices, explaining to Reuters in an interview posted Thursday how some of the world’s richest investors have played the stock market in recent months.

Basically, they bought the dip during the rout earlier this year and, with the stock market pushing toward record highs, feel that the recent rally is running out of gas.

UBS, which is known as the “fortress bank for billionaires,” said that these families, with an average net worth of $1.6 billion, are moving those profits out of the stock market and into illiquid and private assets — everything from residential real estate to private equity.

Stadler said he expects the bearish trend, which is happening all over but is most pronounced in Asia, to continue and weigh on markets for the remainder of the year.

As it stands now, stocks are selling off after a nice stretch of gains, with the Dow

, Nasdaq

and S&P 500

all lower in Thursday’s session.

In a UBS survey earlier in the week, 75% of the bank’s wealthy investors said they believe “life will never be the same again” as the human and economic costs of the pandemic mount.

“With the pandemic not yet in the rearview mirror, investors are navigating a changed world,” UBS wrote in a note. “Most will find their way with clear priorities, trusted guidance — and continued appreciation for the most important things in life.”

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