Investment Report: December 2022 – Optimism for 2023

All portfolios increased in November although a mixed bag of results from individual funds – which is why you have diversified portfolios.  Asia and Emerging Markets did well on the back of a weakened $, whilst US funds fell a little for the same reason.  The UK bucked up despite the Autumn Budget being a bit of a non-event.  The Market likes convention and predictability.  At least with Hunt’s rather strange Budget, whereby the main problems are being put off for another two years, it is back to a conventional approach rather than Truss’s which spooked the Market.

As for the expected continuing recovery in Markets over the next year – not without some short-term volatility of course – we do see some positive news on the horizon.

We should see Inflation reduce and the rise in Interest Rates peak – this has already been allowed for in the Market.  However, until we reach the point of data confirming this, there will be some nervousness.

Even with the War, COP27 and Saudi Arabia, everyone knows that we need to have more local and renewable sources of energy.  Therefore 2023 should see a material acceleration of the amount invested in renewable energy.

China is on our radar for next year as Covid could be problematic over winter and interrupt manufacturing.  Hopefully plans have been made within China to enable work to continue with minimal disruption. Whilst speaking to a food supplier recently (who has an interest in a Chinese company), I became aware that some employers are insisting their employees live and work in the factories with their food provided via sanitised food vans!

So overall what we have is reason to view 2023 with considerable optimism, despite everything – despite inflation, despite the rising interest rates, despite COP27, despite the politics, despite the unrest in China, despite Russia and Ukraine, and even despite bitcoins!

 

The information provided in this report is based on our own opinion and offers no guarantee that our expectations will be met.  Past performance is no guide to future results.  As always, should you have any concerns you wish to raise, please do contact us.

Ian Pennicott FPFS

Chartered Financial Planner