🏆 Goldman predicts next year's best-in-class investment

2023 could be a wild ride | Goldman revealed the investment class it's backing |
Finimize

Hi Reader, here's what you need to know for December 30th in 3:13 minutes.

🥂 This year pushed all of us to our limits, but you made it through with style. So grab your champagne, apple juice, or whatever else you fancy, and give yourselves a big ol’ cheers from us. We’re taking a few days off to celebrate the good bits of 2022, and we’ll see you back here on January 4th.

Today's big stories

  1. The economy might've caught you off guard in 2022, so we checked out what you can expect in 2023
  2. Finimizers told us where they're investing next year, and why – Read Now
  3. Investors aren't in the clear for next year, but Goldman Sachs revealed which investment could ride out the bumps

Hold My Beer

Hold My Beer

What’s Going On Here?

Now that 2022’s rowdy reign is finally over, let’s find out if 2023 looks like your chance to blow off steam – or the hangover from hell.

What Does This Mean?

If one of your New Year’s resolutions is to adopt mindfulness and a positive attitude, you might want to start early. See, 2023 isn’t exactly promising to be the champagne-popping, caviar-downing, throw-your-budgets-out-the-window bonanza you’re hoping for: inflation should ease up, yes, but aftershocks from war-induced energy shortages and central banks’ relentless rate hikes are set to wreak more havoc.

In fact, economists predict the global economy will grow just (time for that deep-breathing practice) 2.4% next year, the lowest in three decades besides the disastrous 2009 and 2020. Still, we’ll take any growth when most pros are predicting full-blown recessions. Case in point: economists at both Citi and abrdn forecast the UK and Europe will likely enter the new year in a (deep breath in) recession, with the US following in the second half of 2023. Uh… you can breathe normally again now.

Why Should I Care?

For markets: Team U-S-A!
The US dollar’s been leading the pack this year, and – despite its recent stumble – it’ll probably stay strong next year. After all, investors tend to flock toward safer assets in uncertain times (read: recessions), and the dollar’s a tried-and-tested bet. So even though greenback-bolstering rate hikes are slowing down, traders still predict the dollar will hold its current value this time next year.

Zooming out: Unleash the beast.
Here’s the exciting bit: one major economy is expected to dodge the economy-busting bullet altogether. China’s forecast to grow over 5% next year, as the country relaxes its uncompromising zero-Covid stance and lets pent-up consumer demand go wild. That should wake up China’s slumbering companies, and the government’s business-supporting policy plans won’t hurt either. Add economy-boosting rate cuts to the mix, and you’ve got all the ingredients of a successful comeback.

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🙋 Ask a question

Analyst Take

Investors Have Fresh Hopes For 2023. Here’s Where You Plan To Invest.

Investors Have Fresh Hopes For 2023. Here’s Where You Plan To Invest.

By Daniel Johnston, Analyst

This year was a doozy.

Investors faced a cacophony of market-shaking conditions, the crypto space delivered the most nail-biting drama since “The Big Short”, and our Modern Investor Summit ended the year with a bang.

So we wanted to find out how Finimizers feel about markets, and where they’re planning to invest in the new year.

Thousands of you answered our survey from all around the world, and one thing stood out head and shoulders above the rest: Finimizers are more market savvy than ever before.

That’s today’s Insight: why Finimizers are still investing – and where.

Read or listen to the Insight here

Finimize x Revolut

Pretty good stuff, right? Our analysts write Insights like this every day, and you can read every single one of them with Finimize Premium.

There’s no better time to get started: our new partnership means you can get six free months of Finimize Premium and three free months of Revolut Premium if you sign up for Revolut today.

We’ll even send you £10 (or equivalent) to your Revolut account to get you started.

SPONSORED BY MASTERWORKS

Everyday investors just banked returns from a million-dollar Banksy piece

It might sound too good to be true, but you could make money from art with Masterworks as well.

The investing platform has built up a wallet-pleasing track record of profitable exits, and even pocketed returns between 13 and 21% from its last three while financial markets plummeted.

For any skeptics out there, here are the deets: the art market’s outpaced the S&P 500 over the last 26 years, and it stayed steady throughout the dot-com bubble and the 2008 crisis.

On top of that, Citi estimates that art has had low correlation to most other asset classes, which could be a recipe for diversification.

You won’t need to wait around either: you can skip the waitlist as a Finimize reader.

Find Out More

See important Regulation A disclosures.

Foresight’s 20/23

Foresight’s 20/23

What’s Going On Here?

Here’s hoping those novelty 2023 glasses have prescription lenses: let’s take a look at what investors might be in for next year.

What Does This Mean?

You can be anything you want to be next year, but maybe be patient. See, the S&P 500 and Stoxx 600 – the key US and European stock indexes – dipped 21% and 13% respectively this year, and teetering economies could mean there’s more to come. Goldman Sachs and Morgan Stanley analysts agree, predicting that interest rate hikes and weak economic growth will curb company earnings and, in turn, stock prices during the first half of the year. But chin up: economists are predicting a rosier-by-comparison 2024, meaning forward-looking markets should bottom sometime next year – probably when central banks stop hiking. So not only could you snap up a few bargains when that happens, but strategists expect a rebound in the second half of the year to pull those two stock indexes around 7% and 5% higher than they are today.

Why Should I Care?

For markets: Not-so-general consensus.
Now, those are average estimates – in reality, analysts’ expectations for the S&P 500 range from a 24% giddy-up to an 11% drop. But history shows that US stocks rarely slip two years in a row (like, a “four times in a hundred years” type of rare), so the odds look promising. But when they have, the second drop has always been worse than the first – a painful 24% on average. So while history says next year is likely to be better, another dip could leave investors nursing another shiner of a bruise.

The bigger picture: The winner is…
If big banks made Christmas cards, Goldman Sachs’s would say, “love your commodities”. The investing titan believes the asset class will ride out a bumpy first few months of 2023, before boasting pumped-up prices due to scarce supply of raw materials. In fact, Goldman predicts commodities will take the best-performing-asset-class medal yet again next year, and says a key commodity index will rise a mouth-watering 43%.

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🙋 Ask a question

💬 Quote of the day

“And now we welcome the new year, full of things that have never been.”

– Rainer Maria Rilke (an Austrian poet and novelist)
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🌍 Finimize Live

🥳 Coming Up – *Gasp* – Next Year...

All events in UK time.

🌪 Preparing Your Strategy For A Volatile 2023 And Beyond: 12pm, January 11th
🤑 Wealth-Building Habits With Carl Richards And Helena Wardle: 5pm, January 11th
🙋‍♀️ Ladies Investing Club: 6.30pm, January 11th
🎙 Live Q&A With CEO Max Rofagha: 1pm, January 12th
👩‍💻 2023 Investing Opportunities For The Self-Employed: 10am, January 13th
🌍 Investing 101: Where To Invest In 2023: 1pm, January 16th
💥 How To Spot The Best Long-Term Investments: 1pm, January 17th
📈 How To Hedge Against Volatility With Crypto: 5pm, January 19th
📑 The Risks And Regulations When Investing In Crypto: 10am, January 27th

🎯 On Our Radar

  1. New Year’s Eve party: sorted. Here’s your guide to making easy champagne cocktails.
  2. Cinemas everywhere are turning blue. No wonder Avatar’s halfway to breaking even.
  3. Maybe the romantic dream is overrated. Living with your partner might not be for you.
  4. Time to get well, 2023 style. Get a head start on next year’s wellness trends.
  5. Curl up in bed. Just remember to bring one of this year’s best books with you.
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