To say that 2022 was a challenging year when it came to smart investing is a massive understatement. While the year began with some optimism as the nation eased out of the height of the pandemic, lingering supply chain issues, the war in Ukraine, and crippling inflation all took a toll as the year progressed.
As a result, 2022 was a punishing year for investors across the board, as the S&P 500 (SPX), the Dow Jones (DJIA), and the Nasdaq 100 (NDX) all descended into the bear market territory.
However, there are opportunities to be found in every financial situation, and 2022 and 2023 are no different. As the year draws to a close, it’s a good time to take stock and shift attention to what the next 12 months might bring.
In that vein, here are five investing trends worth looking at as 2023 draws near, and may provide a more successful financial future.
Inflation Will Stick Around
Inflation affected everything in 2022, from grocery store shelves to gas pumps. Despite the Federal Government’s six interest rate hikes in 2022, inflation will likely stick around well into 2023. As a result, Treasury Inflation-Protected Securities (bonds issued by the U.S. government that offer protection against inflation) will likely remain popular in the months ahead.
Alternative Investments Will be Attractive
Broader diversification has been growing in popularity, and alternative investments may earn a place in a wide range of everyday investor portfolios. An alternative investment is a financial asset that doesn’t fall into a conventional asset category such as stocks, bonds and cash. These investments include private equity, venture capital, hedge funds, managed futures, and collectibles like art and antiques. These investments have been extremely popular with millennials and younger investors in recent history. As a result, it’s expected that this interest will grow across the board.
Renewable Energy on the Rise
Renewable energy projects are rapidly gaining steam with the federal government’s landmark $1.2 trillion infrastructure bill in 2021, followed by the Inflation-Reduction Act of 2022. Coupled with an international natural gas shortage that has been prevalent over the course of 2022 (as well as a rise in climate change concerns due to catastrophic hurricanes, storms, and flooding events around the globe), 2023 could be a great year to invest in everything from electric vehicles (EVs) to solar panels.
Real Estate Remains a Popular Investment
While the real estate market cooled slightly in 2022, (especially with the rising interest rates), real estate is still one of the most popular investments for investors.
A real estate investment trust (REIT), an investment in income-generating assets like residential homes, apartments, hotels, retail stores, and healthcare organizations, was a big trend in 2021. Additionally, as the world climbs out of the pandemic, REITs will likely remain popular. Granted, during the Coronavirus era, properties like restaurants and offices took a downturn, but this will likely change as the country returns to work.
Don’t Give Up on Crypto Just Yet
Cryptocurrencies had a tough year in 2022, which is exactly why they could have a bit of a rebound in 2023. In the past 12 months, multiple stories of scandals, hacks, frauds, and massive bankruptcies of varying companies in the cryptocurrency sector led to crypto market asset losses in excess of 70%. Therefore, considering how dismal 2022 was for this still-popular investment, it’s likely that crypto will start to make a climb from the bottom.
Keep an eye on potential government action on crypto, as well. It’s highly possible that U.S. authorities could take decisive steps regarding regulation for cryptocurrencies, adding stability to the market and adding extra security for investors.
Smart Financial Planning and Financial Solutions Begin with Saddock Advisory
It’s a difficult world for investing right now, with multiple and concurrent factors taking a toll on investors. From inflation to the lingering and still-present effects of the pandemic, it can be hard to identify the best next steps to take as 2023 inches closer.
The best thing an investor can do is to partner with a client-focused wealth management firm that understands the climate and can help make smart moves for everything that comes next.
With decades of experience in planning and investments regardless of global challenges, the experts at Saddock Advisory can help you navigate this difficult period in time, and the months and years ahead. Together we will work to ensure that you are well prepared for 2023, and miles beyond.
