The Top 9 Investing Trends to Watch For 2023

What a difference one year can make.

At the start of 2022prices had been climbing up in U.S. thanks to pandemic supply chain failures and consumers’ accounts that were stuffed full of cash. Remote work appeared to be here to stay, and unemployment was at or near its lowest levels. There was a sense that the economic crisis was now over.

There were many who weren’t as positive, but it wasn’t long before the soaring inflation rate to become a major issue for markets and ordinary Americans.

After some doubt (remember transient inflation) the Federal Reserve pledged to crush the rising cost of living by increasing interest rates. The market plummeted and bonds were also tagged along with it and resulting in a terrible financial year for those who invest.

With 2022 coming to its conclusion with 2022 coming to an end, the S&P 500 has clawed its way out of bear market space, but it is still down 17% at the time of writing. In the year 2023 Here are nine investment strategies that can help separate the warnings from the opportunities.

1. America is still an inflation-prone country

It was the financial glitz of 2022. It stayed on everything. From the gas station to the supermarket up to the 401(k) Investors face more expenses and less dollars to invest in the near future.

The biggest concern for 2023 is if inflation will fall to the Federal Reserve’s target rate of 2. A lot of experts believe that’s likely, but it’s important to note that the Fed’s six rate hikes for 2022 will take time to get throughout the economic system.

Morningstar forecasts that the Fed will loosen its the policy of monetary policy, and cut interest rates to about 3percent by the end of 2023. If this occurs, it won’t aid in the fight against inflation. That means it is likely that Treasury Inflation Protected Securities ( TIPS) and I bonds will remain an investment that is popular for its ability to fight inflation.

2. It’s Possible That The Bear Market Could Stick Around

The Covid-19 rocketship of the stock market went down and caught fire. June 2022 brought an additional bull market that has occurred since the year 2020. This sent investors running to seek shelter.

As stocks finally emerge out of the bear market during the second quarter of 2022. However, markets are still down two-digits.

In normal circumstances, bonds can be able to take the edge off of in a bear market. However, the frenzied rates of interest have led to bond yields declining as do stock prices. For the quarter ending in March 2022 the 60/40 portfolio, which is a classic, had more losses than its stock-only counterpart which has raised questions over what the O.G. portfolio needs to go.

The rise in investor confidence will likely be linked to the slowing of inflation, and the next year may prove difficult for conventional model of asset allocation. models.

While adding the “buy lower” mantra in a constant rotation in your morning meditation playlist is not a bad idea, 2023 could show that investors who buy and hold require more than equity and fixed income to protect themselves from market volatility.

3. Take a look at alternative investments

In terms of diversification in a wider sense, 2023 is a promising year for alternatives to traditional investments getting a spot in the portfolios of everyday investors.

The 2023 portfolio–regardless of your assets, capacity for risk, or plan–should have a higher proportion of amount of alternatives. Because they are not as correlated to traditional asset classes, such as bonds and stocks, alternatives could reduce inflation as well as recession-induced volatility. They can also boost returns higher then dividend-paying stocks on their own.

Previously , the market was reserved for qualified investors and experienced traders ordinary investors are now able to gain access to alternative asset strategies such as commodity and managed derivatives by utilizing an extensive selection of exchange-traded funds that are low-cost (ETFs) as well as mutual funds.

Although expense ratios are higher than average funds however, alternatives’ performance could surpass the higher cost.

4. Savings Bonds Still Have Sexy Sex

If there’s a silver lining in the cloud of inflation that’s the rising interest in savings bonds, specifically the Series I bonds. In April 2022, the Series I bond rate increased to a record peak of 9.62 percent, which was in stark contrast to the S&P’s 15% decrease in the year to date.

Investors looking to lock in the incredibly low rate bought $979 million worth of I bonds on Oct. 28 — the day that was used to purchase bonds before the semiannual rate reset. The purchase caused a crash on the Treasury Direct website. You’d think that the U.S. Treasury was selling Taylor Swift concert tickets.

For those looking to earn alpha on the extra cash they have I bonds at the lower (yet nonetheless astonishing) 6.89 rate of 6.89 percent are available until April 30th 2023. Although they are not liquid for a year following the purchase, it’s difficult to resist a guarantee rate of return, backed by the complete trust that is Uncle Sam.

5. Beware of Layoffs

The most popular hashtag on social media might be #layoff. Since the middle of November, tens of thousand of workers have been let go from tech giants like Meta, Amazon, Lyft and Twitter.

While boldface tech brands have witnessed very prominent waves of job cuts however other industries have suffered themselves suffer. Real estate startups such as Better, Redfin and Opendoor have reduced headcounts due to the rates have risen and prices of homes have drained mortgage applications, closing business sales and corporate revenue.

In a time when cash-strapped public corporations are trying to improve their balance sheets in anticipation of an economic downturn in the coming year, we could be the year that sees the end of the once-strong U.S. labor market. Although experts say that the newest graduates from college won’t be at the mercy of jobs, entry-level positions will have less of an impact on the company financial statements.

That mid-career–especially in tech-centric specialties–could weigh on unemployment figures. Companies looking to cut down on their the cost of payroll might consider more flexible methods of staffing, but leave plenty of employees on the sidelines to satisfy shareholders.

6. Will Crypto Recover?

It’s fairly easy to say that 2023 is going been the best time to invest in crypto than 2022 because it is hardly a better year.

Many stablecoins fell off their pegs in 2022, including TerraUSD and Tether which triggered a mid-year cryptocurrency crash that erased hundreds of billions of dollars in value. Exchanges for crypto however were crippled by the escalating problems and reductions (Coinbase)–not in addition to the abrupt loss of FTX.

In 2023, look for businesses in the cryptocurrency space to attract investors with tales of cash reserves rather than fashionable coins and endorsements from celebrities. Also, look out for major developments in the field of cryptocurrency regulation in Washington, D.C.

The Fed began their 12-week central digital currency bank (CBDC) proof-of-concept project in mid-November. Lawmakers are eager to move forward with the legislation on crypto regulation.

However, many blockchain conversations are likely to be influenced by the scandal at FTX in lieu of its longer-term unexplored potential.

7. New Interest in Renewable Energy

The significant $1.2 trillion Infrastructure bill for 2021 and the Inflation Reduction Act of 2022 will make trillions of federal investment accessible for projects that use renewable energy sources.

As supply chain issues held back renewable energy development including electric cars ( EVs) to solar panels in the past two years 2023 is likely to be a favorable year for renewable energy.

Battery storage as well as the adoption of electric vehicles closely interwoven, BDO Global predicts a great year for storage systems that use renewable energy. The increased concurrence on the EV market by newcomers such as Rivian, Lucid, Ford and Chevy could push established companies such as Toyota and Tesla ahead of them.

Natural gas shortages resulting due to European Union conflicts have increased policy momentum in favor of clean and renewable energy sources.

8. Hybrid Robo-Advisors Might have a moment

Recent information from Parameter Insights shows that investors have opted out of self-directed investment instruments like robot-advisors as well as brokerage accounts at an alarming rate in 2022. There are many theories about the reason for this exodus and two of them leading the way Wealthier investors could be going toward traditional financial advisers and DIYers might be content to see out the market rebound with cash in the bank.

Whatever the reason hybrid robo-advisors, which offer investment options that are algorithm driven and have access to traditional advisors set to generate lots of attention in 2023.

With people seeking more worth for money in high inflation, the affordable and expert recommendations behind hybrid robos are hitting the market. With a range of services such as automatic refinancing along with tax harvesting access to financial advisors with a price that is usually lower than traditional advisors-

The price-sensitive economy makes investors more focused on value than ever before This positions hybrid robots as the most beneficial option for investors looking for direction but concerned about the cost.

9. Hello, TD Ameritrade

Have you ever you searched to find a new broker online? If you’re an client of TD Ameritrade client, 2023 could be the perfect year to look into your choices.

Charles Schwab acquired TD Ameritrade in the year 2019 and until recently, both platforms were together. The situation will shift in 2023. TD clients have been informed the accounts they have will be transferred to the Schwab platform in the month of January in 2023.

“We’re getting close to the point that two of the top firms merge in the same way. TD Ameritrade clients become Schwab customers,” said Jonathan Craig the head of customer services for Charles Schwab.

According to the note from Craig, Schwab has announced that it will take the time-shifting accounts and customers are expected to give three months’ notice. The move will be made on a Saturday.