Portfolio Diversity Best Way To Success
Portfolio diversity with downside protection and active management is the best way to find investment success in 2023, says a WTW report. Its ‘Global Markets Overview’ noted that current asset market pricing implies there will be a drop in inflation in response to central bank interest-rate hikes, leading to cuts in those policy rates and only a moderate economic slowdown. However, “we think this understates the potential for higher-than-expected inflation, higher-than-expected interest rates, and/or lower-than-expected growth.” This means asset allocators should be aware that things will be uncertain for some time to come. “The major economies remain imbalanced; the path back to balance is likely to be volatile and portfolio responses need to adapt,” it says.