Investors need to brace for higher volatility, lower returns in 2020: UBS

Here are the brokerage’s five key predictions for next year and the next decade

Stepping into 2020, and a new decade, investors will have to brace for higher volatility, lower returns, technological disruptions, and much more. Here are the brokerage’s five key predictions for next year and the next decade:

5 predictions for 2020

Gold to outperform: Gold’s good run to continue. It should outperform more cyclical commodities, says UBS

Dollar to weaken: US dollar to weaken and higher-yielding currencies will do well

US-related uncertainty: Because of US presidential election and trade negotiations, uncertainty will be higher. Investments less exposed to the outcomes of political choices should be preferred

Dividends and quality: High-dividend paying and quality stocks will do well

Real estate risks: Housing market in major cities to come under pressure. Real estate exposed to long-term trends like e-commerce can do better

5 predictions for next decade

Returns to plateau: Investors will have to brace for lower returns and higher volatility for most financial assets than in the past decade

Disruptions to continue: Major environmental and technological changes to disrupt existing norms

Deglobalisation: UBS expects deglobalisation to gain momentum, and a less favourable political backdrop for high-income individuals

Governments, central banks cooperation: Brokerage expects increased coordination between governments and central banks to spur economic growth or end inflationary pressures

Time to realign: Businesses will have to adapt to changing demographic and technological landscape, stiffer labour, trade, and environmental regulations