What does 2023 hold in store for investors?

As we all know, predicting the future is a futile endeavour. As such, our recommended strategy is to focus on the things that can be controlled, such as your investment costs and portfolio diversification.

However, understanding sentiment can be useful as it is a major market driving force. So, in this article, we looked at survey-based data to see what people believe will happen in the year ahead, including experts’ top risks and predictions.

Risks

*The following data is based on the Global Risk Report from the World Economic Forum.*

Respondents were asked to rate the top five currently manifesting risks in order of how severe their impact will be on the year. The results were as follows:

  1. Energy supply crisis
  2. Cost of living crisis
  3. Rising inflation
  4. Food supply crisis
  5. Cyber attacks on critical infrastructure

Experts’ Predictions

Data analysed by Visual Capitalist in their annual prediction consensus shows the most common predictions made by industry experts such as the IMF, Goldman Sachs, Vanguard and a long list of major banks, fund houses and economic experts in the media.

They looked at over 500 publications and statements made by the experts to see which were the most common predictions for 2023. These are the 25 most common predictions in order of most common first:

  1. Artificial Intelligence will pop up everywhere
  2. Global recession risk is high
  3. The US dollar surge has come to an end
  4. Bonds are a good investment option
  5. Interest rates will peak in 2023
  6. The outlook is positive for emerging markets (Especially commodity exporters)
  7. Real global GDP growth will be between 1.5% and 2%
  8. China’s economy will bounce back after reopening
  9. Value will trump hypergrowth
  10. Inflation will cool off but remain above target levels
  11. Regulators will clamp down on TikTok as well as other tech companies
  12. Energy will remain expensive
  13. No Taiwan invasion
  14. The crypto winter will continue
  15. Broad equity indices will rise
  16. Google’s stronghold on search will loosen
  17. The Russia – Ukraine war will not end in 2023
  18. Following Elon Musk, Silicon Valley will slash staff and costs
  19. Work culture will continue to bend towards flexibility
  20. Tension will grow between citizens and governments
  21. European unity will be tested
  22. Education will face disruption from various angles
  23. India will have a strong year
  24. More big retail brands will launch recycling programs
  25. More manufacturing will shift away from China

Interestingly some of these have already started to come true, such as tech firms cutting staff and A.I being more prevalent. Microsoft just announced a culling of 10,000 employees last week, and Open A.I’s ChatGPT and many A.I image generators making headlines already this year.

Global Stock Market Sentiment

The IPOS Global Advisor Survey looks at results gathered from 36 different countries and more than 24,000 adults who were asked a question on whether “major stock markets around the world will crash” in the following year and were asked to respond either “likely” or “unlikely”.

The results of this survey indicate that 50% of people think global stock markets are likely to crash in 2023 and only 31% believe this to be unlikely (19% not answering either way). This is a 13% increase in people believing a stock market crash is likely compared to the survey results in 2022.

Sentiment can be a strong driving force and, in some cases, an almost self-fulfilling prophecy, so it is worth noting this increase in negative sentiment. However, we can also see that much of last year’s predictions didn’t come to fruition, so it would be unwise to make drastic changes to a portfolio in response to this data.

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