Even as the market ascends to new heights, wealthy investors are bracing for a turbulent period that could produce a “significant drop” in equity benchmarks in the near term.

That is according to a recent survey produced by UBS Wealth Management that finds that some 55% of deep-pocketed investors are preparing for a drop in the market before the end of the 2020. That is not to say that this cohort, consisting of 3,400 high-net-worth investors with at least $1 million in assets, doesn’t hold a mostly upbeat view of the economy and stock market over a longer period, the survey finds.

Against a backdrop where worries about a China-U. S. trade war and concerns about an economic slowdown dominate here and abroad, cash is expected to be king and will also rule a healthy portion of investors’ portfolios.

Indeed, wealthy investors hold 25% of their portfolios in cash, far higher than the roughly 5% that UBS recommends on average.

In fact, holdings of cash since the financial crisis have been particularly elevated, with the past two quarters reflected cash holdings that were three times the recommended average (see chart below)……more here