2023 Investment Outlook – Opportunities and Strategies
We had the pleasure of sitting down with Chris McGiffen from Marret Asset Management, where he outlined the year that was (2022), and what we have to look forward to in 2023.
Believe it or not, 2022 will go down as the ‘worst’ year in over a hundred years for combined bond and equity performances. Yes, worse than 2008 and 1931 when you take the bond market into account.
Looking ahead, here are a few of the Strategies and Thoughts from Chris that we found particularly compelling:
- We will likely have one of the best bond environments in over a decade for the next few years – safe government bonds are poised to give us strong returns
- Like governments, we need to control our spending – Canadians have one of the highest debt-to-income levels in the world. Be strategic with mortgages (lock in short-term only for now)
- High costs and inflation will start to come down this year; yet continue to prioritize spending on Needs over Wants – delay discretionary purchases to 2024/2025
- This recession may be not as ‘deep’ as some originally thought. Opportunities in the labour market will be good for the decade ahead – wait to make career changes until Fall or 2024
- Tax planning will continue to be incredibly important to wealth accumulation. Directing monthly savings into RRSPs and TFSAs is a must. Long-term holdings in real estate and stocks that are taxed as capital gains need to be a conversation with your advisor.
Here’s an article that outlines some of the points above, which our managers are already moving on behind the scenes: Investing in Bonds vs Stocks: Ideas for 2023 | Morgan Stanley
In conclusion: more volatility is coming, but we are also now seeing significant opportunities that set us up for success with the right planning in place.