2023 starts with easing inflation but rising risk of recession. Our watchlist for the economy and markets shows why we see high probability of a recession in the second half of next year, but why it could be mild. Policy uncertainty will remain high as the Fed’s tightening cycle continues. 2022 has been a bruising year for markets, and investors may be tempted to jump back into traditional investments.
We look at what’s changed in fixed income, gauge how to time the equity market, and how to manage through volatility. Finally, we break up with the 60/40–it’s time for alternatives. We expect 2023 to be a year of economic and policy uncertainty as risk of recession is high. We break down how to manage through volatility, and where to find value and diversification.
