The year ahead looks brighter for financial markets, following a turbulent 2022, says deVere Group CEO Nigel Green.
The bullish prediction follows a difficult 12 months for markets, which were impacted by the Russia-Ukraine war, inflationary pressure, a global economic slowdown, a strong dollar and ongoing supply chain issues.
Green says: “After an astonishing bull run of 13 years, financial markets went into bear territory in 2022 amid increasing global volatility, creating a pretty grim environment.
“However, the landscape is already looking brighter for the year ahead. We expect some key market, macro and policy shifts that will provide a significantly more positive outlook for investors in 2023.”
Green says inflation is likely to peak in most major economies and as it begins a return to target, the cost of living will drop for consumers and central banks will take a softer approach to interest rate hikes.
Market volatility has also lowered valuations of some high-quality equities, which can create long-term investment opportunities and generate higher income for investors.
In addition, the rise of digitalisation will positively impact markets, says Green.
He says: “The momentum is continuing to build. This will help increase efficiency, increase productivity, lower operational costs, improve customer experience, improve competitive advantage, and improve speed and outcomes of decision making.”
Lastly, dollar strength is expected to peak in mid-2023.
“Worried about a global recession, investors have piled into the dollar looking for a safe haven. This has negatively impacted both developed and emerging markets globally, fuelling inflation and raising the cost of imported goods. It has also added to the need for some central banks around the world to tighten their own financial conditions. But we expect the dollar strength to peak in mid-2023,” says Green.
According to Green, investors should look at stocks that are recession-proof, including food, energy and financial services sectors.
Green adds: “It’s been a rough ride in 2022 for the markets, but the indications are such that we expect more favourable conditions for the year ahead, and increasingly so, as we move through 2023.”
