2022’s market themes of inflation, the Fed and the economy are still behind the wheel in 2023. However, we think these conditions are heading toward a turning point, which should produce a more favorable outcome for market performance in the year ahead.

The ride is likely to start out bumpy, but we think 2023 will ultimately steer in a positive direction as a new expansion and bull market take shape.

Here are 10 of our key views for 2023.

Planning strategies and considerations for 2023

5 portfolio strategies you can use today

1. Balance your stocks and bonds. We believe a neutral mix between stocks and bonds can help smooth the path ahead. Stocks may search for their footing early in the year, but valuations have already taken a hit, which could help improve returns. And with interest rates higher than they were a year ago, bonds can offer more income and are better positioned to provide diversification, particularly if the economy weakens.

2. Consider adding international equity investments. International stock valuations have become more attractive relative to U.S. stocks as prices declined over the past year. Additionally, a weakening dollar could boost international returns. Look at emerging-market stocks in particular: If China eases monetary and zero-COVID policies, this could be a tailwind for emerging-market returns.

 Opportunistic asset allocation guidance

Our opportunistic asset allocation represents our timely investment advice based on current market conditions and our outlook over the next one to three years, and is relative to our strategic asset allocation guidance. We believe incorporating this guidance into your portfolio may enhance your potential for greater returns without taking on unintentional risk.


 Equity sector guidance chart

Our equity sector guidance represents our view of the attractiveness of each sector over the next six to 12 months and is relative to the S&P 500 sector weights.

3. Check your sector diversification. Investing across a variety of sectors and styles can help spread out your portfolio’s risk. We favor sectors that can provide defense as the economy weakens, such as health care and consumer staples. Overweighting technology stocks may also prove beneficial if interest rates trend lower, particularly given their relatively attractive valuations.

4. Develop your rebalancing strategy. We expect markets to focus on more than just inflation in the year ahead. As this happens, different markets are more likely to move in different directions, increasing the chances your portfolio may move away from its target allocation. A rebalancing strategy can help you stick to your long-term plan and stay aligned with your financial goals.

5. Consider systematic investing. We’re likely to hit more bumps in 2023 as investors evaluate central bank policies and their impacts to economic growth. But it’s stressful to try to time the market’s ups and downs. Investing at regular intervals can take the guesswork out of investing, helping you take advantage of more favorable prices as markets fluctuate — by dollar cost averaging — and providing natural rebalancing opportunities for your portfolio.

Talk with your financial advisor about how these portfolio strategies may help you position your portfolio for 2023.

Important Information:

Investing in equities involves risks. The value of your shares will fluctuate, and you may lose principal. ​

Special risks are inherent to international investing, including those related to currency fluctuations and foreign political and economic events.

Before investing in bonds, you should understand the risks involved, including credit risk and market risk. Bond investments are also subject to interest rate risk such that when interest rates rise, the prices of bonds can decrease, and the investor can lose principal value if the investment is sold prior to maturity.

Systematic investing does not guarantee a profit or protect against loss. Investors should consider their willingness to keep investing when share prices are declining.

Diversification does not ensure a profit or protect against loss in a declining market.