Right here is our 2023 funding outlook. I did this somewhat in another way this yr by offering a state of affairs evaluation with completely different likelihood distributions. I believe this can be a a lot better method of analyzing potential outcomes and can let you higher perceive the vary of outcomes.
My overarching view is that the vary of outcomes nonetheless stays very large as a result of we’re digesting the COVID increase which is evolving right into a bust. Which means portfolio focus is more likely to be a excessive threat endeavor and that broad diversification stays smart as we navigate this unusual interval. The Self-discipline Index was bearish in 2022 and nonetheless stays bearish. It’s exhausting to see that altering until shares fall considerably and/or the economic system stabilizes considerably. However, markets are beginning to digest the modifications. Equities, regardless of nonetheless being unusually dangerous, look way more engaging than they did a yr in the past. In the meantime, buyers wish to bail on bonds, however they give the impression of being extra engaging to me than they’ve in a really very long time. Having the ability to purchase a Treasury Invoice at 4.75% is a present in my view. Even junk bonds at 8% are beginning to look respectable. Nevertheless it’s nonetheless going to be a yr of endurance for my part and one that may check your self-discipline at occasions.
I want you all a really pleased new yr. I hope you get pleasure from this outlook and discover it helpful as all of us attempt to navigate the approaching yr.
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