2022 has proven to be an economically difficult year for everyone, with investors facing a turbulent and unpredictable market as a result. The fallout from the global pandemic, combined with the precariousness of the situation in Ukraine and other political instability has made the prospect of a recession appear increasingly likely and led to inflation rising to levels that have been crippling for some. As the tumultuous last 12 months draw to a close and we start to look forward toward 2023, we have collated some of the popular predictions for investing trends in the coming year.
The Bear Market Isn’t Behind Us Yet
2022 saw the stock market crash astronomically, not long after the recent bear market of 2020 where the Covid-19 pandemic was the catalyst. Whilst the market has somewhat recovered since then, with stock and bond values gradually creeping up once more, they are still 17% lower than they were before the summer of 2022. In previous similar scenarios, it has taken 50 months to recover from cyclical bear markets, suggesting that we have a long way to go before stability is on the horizon and that we’re far from being out of the woods yet.
Inflation Set to Continue Rising
It has been almost impossible to access any news or media outlet during the past 6 months without coming face to face with the term ‘inflation’. For many, it has been the spectre that has haunted 2022, plunging a considerable percentage of the population into economic difficulty. Unfortunately, the rise of inflation is unlikely to coincide with the end of the year and is expected to continue to increase into 2023. Whilst there are some indicators that the rate might fall towards the end of the first quarter of the year, it is expected to remain above 3% for the next 12 months, not returning to target until 2025.
Many predict that in 2023, renewable energy will become part of many investors’ portfolios as a push for eco-friendly and climate-conscious alternatives became apparent in 2022. Whereas clean energy initiatives have previously been centered almost exclusively in more affluent, wealthy communities, this is beginning to change, with the movement becoming far more widespread and accessible. This is resulting in more investment opportunities becoming available, with interest being bolstered by Biden’s recent Inflation Reduction Act which offers federal investment in renewable energy projects.
Inheritance Planning Will Become A Priority
It seems that the general population will not only reconsider how they invest in 2023 but also why they invest and what will happen to these assets when they die. An upward trend already apparent in 2022, it is believed that the uncertainty of the economic landscape predicted in the coming year will push investors to start thinking further ahead and planning for their future, and that of their families and beneficiaries.
If you would like a full review of your finances heading into 2023 and the options available to you, you can arrange a complimentary, no-obligation consultation with one of our experienced advisers by clicking the link below.
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This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity.