UBS wealth manager's 2018 investment outlook
NEW YORK (FOX5NY.COM) - 2017 was a great year on Wall Street. The Dow, S&P, and Nasdaq were all up strongly for the year. But that doesn't mean you should get out of the markets in 2018.
Rachel Gottlieb, senior vice president of wealth management at the financial services firm UBS, says this is not the time to sell your equities. Even though valuations are high compared to where they were a decade ago, Rachel says they're not particularly stretched. Bull markets, she says, end on imbalances and excess and we're not seeing either of those occur.
UBS sees a lot of value in the year ahead. UBS sees opportunities in the financial sector, driven by deregulation, tax reform, and interest rates moving up.
UBS also sees opportunities in energy. Rachel says oil prices have moved up, but supply is down and demand is high, so there should be room for energy prices to continue going up in 2018.
UBS also sees opportunities in technology as we shift to self-driving cars and robots.
One place UBS doesn't see value is in Bitcoin. Rachel is particularly concerned about the cryptocurrency's sudden and frequent drops, comparing it to getting paid on Monday and then going to buy your groceries on Friday at Whole Foods and getting 75 cents on the dollar. UBS thinks bitcoin is a bubble but does like the underlying technology, Blockchain.
While people are still trying to figure out how the GOP's tax reform law will affect their income in 2018, expect the corporate cuts to boost your portfolio. UBS believes the cuts in taxes for corporations will directly translate into corporate earnings growth and gains. Rachel anticipates an upshot in the markets in 2018 as a result.
And how about interest rates? UBS is projecting that the Fed Reserve Bank will raise rates twice in 2018 and expects the central bank to be very measured and pragmatic so as not to disrupt the economy.
While geopolitical risks like North Korea remain this year, UBS says you should be more concerned about your own risk profile affecting your investments.
Rachel says if you're not taking on too much risk and are well-positioned, you should have a good 2018.