During the last decade or so, the world’s wealthy have been content to sit on their cash and wait out the low rates and uncertainty. Swiss banks are beginning to see an end to that strategy, and all that cash could once again be put to use. Ralph Atkins writes:
A striking feature of global financial markets since the crises of 2007 and 2008 has been the propensity of many wealthy private investors to sit out the turmoil, holding cash in bank accounts rather than in riskier assets. Might that be about to change?
The word among bankers in conservative Switzerland – the world’s largest centre for cross-border private wealth management – is that it quite possibly might.
Bank results season has been punctuated by optimistic comments to the effect that US economic growth under President Donald Trump, market euphoria, the return of inflation and central bank moves towards raising official interest rates will finally persuade clients to put their money to work.
“Nobody wants to be sitting on tons of cash. There would be a huge opportunity cost,” says Boris Collardi, chief executive of Julius Baer.
UBS, meanwhile, has reported “more questions on how to redeploy cash”, says Mark Haefele, chief investment officer. “We’re getting more questions on how to redeploy cash. The corrosive power of inflation on cash is increasingly a topic. There is only so long that investors can worry that the world might end tomorrow.”
Read more here.
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