UBS analysts believe investors should stay invested in equities despite concerns over inflation and rising bond yields, arguing in a recent note that waiting for a better entry point risks missing further gains.
U.S. stocks recently pulled back from record highs, with the S&P 500 falling on Wednesday and Thursday before regaining some ground on Friday.
Brent crude is trading above $104 a barrel amid reports the White House was considering fresh strikes against Iran before the midterm elections. Furthermore, oil may continue higher on Monday as there have been further strikes on Saudi Arabia over the weekend from the Houthis.
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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
Production shut-ins in the Gulf of Mexico ahead of a developing hurricane added to supply concerns last week.
“Additionally, reports that several major tech companies were seeking to raise billions of dollars in debt have kept Treasuries under pressure, although a strong auction of 10-year US notes later offered some relief,” wrote UBS.
The 10-year yield rose as high as 5.36% intraday on Wednesday, a 24-year peak, before pulling back after a strong auction.
“Markets may have to climb a renewed wall of worry to set fresh records, but waiting for these concerns to fade could mean missing further gains,” the bank’s chief investment office wrote. “We believe investors should focus less on finding a perfect entry point and more on maintaining exposure while managing concentration and timing risks through a disciplined portfolio approach.”
UBS suggested using strong performance as an opportunity to trim positions that have become overly dominant and redirect capital across a wider range of sectors and regions.
The bank warned that sitting on cash leaves investors exposed to missed compounding and erosion from inflation, taxes and withdrawals.
“Investors should not interpret persistent market worries as a sign that the rally is over,” it added. UBS said those able to tolerate the risks could also consider broad commodities and hedge funds.
