Right here is our 2023 funding outlook. I did this just a little in a different way this yr by offering a situation evaluation with completely different chance distributions. I believe it is a a lot better means of analyzing potential outcomes and can can help you higher perceive the vary of outcomes.
My overarching view is that the vary of outcomes nonetheless stays very huge as a result of we’re digesting the COVID growth which is evolving right into a bust. Because of this portfolio focus is prone to be a excessive threat endeavor and that broad diversification stays clever as we navigate this unusual interval. The Self-discipline Index was bearish in 2022 and nonetheless stays bearish. It’s laborious to see that altering until shares fall considerably and/or the financial system stabilizes considerably. Then again, markets are beginning to digest the modifications. Equities, regardless of nonetheless being unusually dangerous, look far more enticing than they did a yr in the past. In the meantime, buyers need to bail on bonds, however they appear extra enticing to me than they’ve in a really very long time. With the ability to purchase a Treasury Invoice at 4.75% is a present for my part. Even junk bonds at 8% are beginning to look respectable. Nevertheless it’s nonetheless going to be a yr of persistence in my opinion and one that can take a look at your self-discipline at instances.
I want you all a really blissful new yr. I hope you take pleasure in this outlook and discover it helpful as all of us attempt to navigate the approaching yr.