2023, THE OUTLOOK FOR THE YEAR AHEAD
The 2022 concerns of inflation, the war, and the hangover from COVID will affect 2023.
World banks are on a mission to control inflation. They will succeed by raising interest rates.
Interest rates have increased rapidly; the increases are not over yet. A fear now is that interest rates will be increased by too much. The current rate in Australia is 3.1% the consensus is that the RBA will increase rates to maximum 3.85%.
If inflation begins to ease, stock markets are likely to increase rapidly.
Recession seems much more likely especially in the US, Europe, and parts of Asia. Here in Australia? My view is that we will again be the lucky country. We have resources that are in demand!
Where to invest in 2023?
- Increase exposure to Fixed Interest.
- For direct shares consider Lithium stocks, Health stocks, some banks and gold stocks.
- International Shares and property keep steady with small increases.
- Dollar cost averaging is likely to be a good strategy. This is the process of regular saving as asset values decline giving you more of the assets at a cheaper price to make a profit on when prices increase.
- Invest in property for yield only.
Last year fixed interest underperformed. It was the first year for many years that Australian Shares, International Shares, Property and Fixed Interest all reduced in value at the same time.
I believe that 2023 will see a rebound of value for Fixed Interest. That said, high volatility is likely to persist.
As always have faith in your strategy over the medium to long term (4-7years) and feel free to call me with any concerns about your wealth creation.
I look forward to our next review meeting.
Yours Faithfully,
Steve Burge