If you wish to make it in 2023 after riding out this year's choppy market, you're at the right place
Before we discuss the top 10 stock picks for 2023, we can
all agree that the economy has two pathways from here. One, the real impact of
the rate hikes sits in front of us and will trigger a deep recession in 2023.
Two, the rate hikes in 2022 were appropriate for the level of inflation, and
the market will steadily recover in 2023 as rates stabilize.
We can see that, historically, the stock market continued on
an uptrend during a rate hike environment. The stock market only went into a
deep correction after a lag of at least a year and a half after considerable
rate hikes. In 2022 though, the market is heading down while interest rates go
up, with little delay. That doesn’t look good.
Conversely, a sensible way to explain this is that things
are much more fast-paced in 2022. People can hit sell on their phones a few
seconds after getting the news of a rate hike. Moreover, the pace of rate hikes
currently is much faster than the ones two decades ago.
The takeaway here is that no one can accurately predict what
2023 holds. Either Federal Reserve Chair Jerome Powell engineers a soft
landing, or companies, with a collective debt of $24 trillion, will have to
significantly reduce their headcount to make interest payments.
With that in mind, it is critical to find a balance between
both of these outcomes before investing. Your assets shouldn’t collapse in the
worst-case scenario, nor should they miss out on a bullish stock market. The
following ten stock picks for 2023 maintain this balance between upside
potential and safety:
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