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.
Daniel Johnston

about 1 year ago6 mins

  • You have your concerns, sure, but you haven’t ditched investing yet: you’re keen to invest in stocks next year, especially (Big) tech ones. What’s more, your predictions for when the stock market will bottom line up with the experts.

  • You’re standing by crypto for now, despite this year’s dip and the infamous FTX fallout.

  • Alternatives are set to make up a bigger chunk of your portfolios going forward, as you look for returns outside of everyday investments.

You have your concerns, sure, but you haven’t ditched investing yet: you’re keen to invest in stocks next year, especially (Big) tech ones. What’s more, your predictions for when the stock market will bottom line up with the experts.

You’re standing by crypto for now, despite this year’s dip and the infamous FTX fallout.

Alternatives are set to make up a bigger chunk of your portfolios going forward, as you look for returns outside of everyday investments.

Mentioned in story

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 – you can check that out here. 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.

You’re still backing stocks – even Big Tech ones.

Responses to “When are you expecting the bottom of the market to be for stocks?”
Responses to “When are you expecting the bottom of the market to be for stocks?”

You guys sure have your fingers on the pulse: 60% of you expect to see the market bottom within the next six months – a bold call given that seemingly endless interest rate hikes and relentless inflation have already given stocks a battering this year. You’re bang in sync with the experts: Bank of America’s latest Global Fund Manager survey checked in with 281 fund managers who oversee a whopping $728 billion in assets between them, and while it turns out they expect stocks to struggle through the first half of next year, they see them rebounding in the second half.

Makes sense, then, that nearly three-quarters of you plan to invest some of your surplus income into stocks over the next six to 12 months, with 60% of you picking out index funds too. You still really fancy Big Tech stocks, with 64% of you backing the usual suspects – that’s the likes of Apple, Microsoft, Google, Meta, and Netflix. But while your conviction looks clear, analysts have no clue on this one: data out earlier this month showed they’re eight times more uncertain about next year’s Big Tech earnings – the key driver of stock prices in the long term – than they are about other major companies in the S&P 500. Still, if markets do bounce back in the next six months, you’d be brave to bet against Big Tech: it’s not unlikely that it’ll lead the way given its massive sway on the major indexes – it makes up around a quarter of the S&P 500, after all. If you want some more inspiration, take a look at our Summit event all about the best tech stocks to watch next year.

Results of poll asking which stocks Finimizers are looking at investing into the next year (multiple answers were allowed).
Results of poll asking which stocks Finimizers are looking at investing into the next year (multiple answers were allowed).

But Finimizers know better than to put all their eggs in one basket: plenty of you are backing a whole range of different sectors, including future-proofing portfolio picks like renewable energy and defensive stocks like healthcare and consumer staples. So sure, you might not be on the exact same wavelength as fund managers, who seem to have focused more on those defensive go-tos. But it does show you really understand the importance of holding a diverse portfolio, especially in hard times like these: do it right, and you could minimize the swings in your investments as gains in one sector offset falls in others.

You haven’t given up on crypto yet.

This might come as a shock after the whole FTX fiasco, but crypto came in a respectable third place after stocks and index funds: in fact, 38% of you plan to invest in the digital space in the next year. That’s probably because over half of you expect bitcoin to be higher next year. And boy, would that please crypto-heads: the OG cryptocurrency’s fallen around two-thirds this year alone. Now, while some analysts do predict that bitcoin could even fall another 40%, the bulk of banks and investment managers still believe it’ll pick up at some point next year. And in a turn of events, the FTX debacle could end up working for the sector in the end: the fallout could speed up regulation in the space, in turn enticing more investors and fueling wider adoption. That includes you lot: 58% of you said you’d be more inclined to invest in crypto if there was more regulation in the space.

Remember, though, that there’s more to crypto than just bitcoin. But if you are planning to look elsewhere, be careful to avoid the more speculative corners of the market, and focus on projects that have real-world applications like Ethereum. They’re most likely to drive the next stage of growth, so they could help you benefit from the bounceback – if and when it happens.

You’re concerned, sure, but you’re not done with investing.

Over half of you said the rising cost of living is your biggest financial concern right now, trouncing the second-place pick of rising interest rates by almost double the votes. Well, we finally have some good news: both of those problems seem to be calming down, with signs aplenty that global inflation has peaked and that central banks are easing up. That’s probably why a record 90% of those fund managers we mentioned earlier expect to see lower prices next year.

Responses to “What is your biggest financial concern at the moment?”
Responses to “What is your biggest financial concern at the moment?”

The most impressive part, though, is that you haven’t let those worries affect your investments: only 1% of you plan to sell off most of your holdings, while nearly 30% are aiming to invest more than usual to make the most of lower prices. That’s a clear sign that Finimizers have leveled up, and have enough experience and knowledge to zoom out and see the bigger picture. After all, downturns don’t last forever, and history shows that sticking to your investment plan – so long as it’s well thought-out, of course – can pay off in the longer term, especially if you can make the most of the dips.

Some of you have your eyes on alternatives too.

You’re widening your investment nets, that’s for sure. Nearly half of you said you plan to invest in alternative assets in the next six to 12 months, and your top three picks had a pretty even weighting: that’s real assets, venture capital (or crowdfunding), and private equity. That’s probably a smart move: real assets can be great inflation hedges (inflation might’ve peaked, but it’ll still be high for a while), while private equity and venture capital have held up well during many stock market ups and downs in past turbulent times. The same goes for a heap of alternative investments from art to fine wine, but do your research before you take the plunge. Truth is, there’s one big difference between alternatives and everyday investments like stocks: liquidity. See, when you trade public stocks on exchanges, there’s typically always a host of buyers (and sellers) ready and waiting. That means you can offload your asset for a specified price at a moment’s notice. Alternatives, on the other hand, are quite often traded in private markets. That means everything’s shrouded in more mystery, and you only really know how your investment has done when you lock in a deal with another party to sell it. As a result, your investment research process is more important than ever if you’re swooping up alternatives, because you generally can’t dip out of any bad deals quickly – or even gauge your progress over time with any certainty. Simply put, make sure you have a strong conviction and knowledge of the market before pulling the trigger. (For more on alternatives, check out our Summit event video.)

Results of poll asking “What alternative investments have you got your eye on?” (multiple answers were allowed).
Results of poll asking “What alternative investments have you got your eye on?” (multiple answers were allowed).
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Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

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