Investors should expect market volatility in the year ahead but shouldn't offload equity holdings, according to UBS Global Wealth Management CIO Mark Haefele.
In his 2019 outlook Haefele, who is overweight global equities, believes investors should retain positions in the sector and use medium-duration US government bonds and the Japanese yen to hedge against volatility.
He said: ‘A slight slowdown in economic and earnings growth doesn't mean no growth, and the recent sell-off has left a number of assets more attractively valued, but investors must also take into account the tense geopolitical environment as well as monetary policy tightening.’
Haefele also believes investors should take advantage of the constant development of sustainable and impact investing. The CIO also predicts the price of crude will rise towards $85 (CHF 84.70) per barrel over the next six to 12 months, supporting prospects for the Middle East.
However, he encourages investors to diversify their portfolios to protect against the geo-political risk of one specific region.