Investment themes and opportunities 2023
December 1, 2022
The world is currently in flux across various fronts and we believe investors should act promptly to get ahead
The world is currently in flux across various fronts. A global economic slowdown amid monetary tightening precipitated a bear market, which was then exacerbated by a “summer of disasters,” conflict, and polarisation within and between countries. Governments around the world are facing sizeable challenges in managing the levels of debt built up over the past decade and especially the past two years. Inflation has continued to balloon above central bank targets, causing sharp rises in interest rates. At the same time, the conflict between Russia and Ukraine heightened the problems of complex and geopolitically sensitive supply chains and led to steep spikes in energy prices, particularly in Europe.
"What if?" Should be the main question on investors' minds; in a world where potential outcomes are so dispersed, relying on the central case could be particularly dangerous. One scenario that investors should understand the ramifications of is one where we enter a higher inflation regime even after today's bout is over.
Head of Global Strategic Research
Three investment themes and opportunities for 2023
We have translated these experiences and developments into three themes for investors for 2023 and beyond, combining lessons from the 1970s with foresight fit for our new situation.
We assess current investment challenges, such as resources conflict, weak growth, spiralling inflation, monetary/fiscal tightening, in the context of the lessons learnt in previous years to equip investors for whatever comes next. We provide insights into inflation, the end of “free money” and the balance of power.
Against a backdrop of both increasing interest in sustainable issues and pushback against counterproductive sustainability culture, this theme suggests that investors are unwavering in their commitment to sustainability principles to ensure a joined-up transition. We provide insights into the “resource code”, the age of engagement and the mother necessity.
This theme recognises the importance of good governance to enable investment committees’ to take advantage of opportunistic investments, dynamic diversification and the construction of robust portfolios (including private markets). Investors in the 1970s would have been envious of the toolkit available today. We provide insights on the private eye on the case, operational alpha and dynamic diversification.
Deja new – from hindsight to foresight
Download the report to learn more about the three key themes which we believe will better position investors for success in 2023 and beyond.
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