Large piles of cash still sitting on the sidelines are one reason UBS Wealth Management’s CIO Mark Haefele thinks the US stockmarket still has upside. A poll of 1,200 wealthy UBS clients across the globe revealed that two-thirds agreed global equities would be the best-performing asset class over the next six months. Despite that bullish call, however, a quarter of the respondents still had the largest portion of their portfolio in cash, as much as 30% in some cases.
Haefele says that if investor confidence improves, a portion of this idle cash will get redeployed in the stockmarket, driving prices higher. He thinks US equities will return around 7% or 8% this year.