Key Investment Strategies to Navigate the 2023 Market

In the last few years, global markets have faced unprecedented challenges including market and supply chain disruptions from the COVID-19 pandemic, a massive runup of stock prices, rampant inflation, interest rate hikes by central banks, all followed by an increasingly high chance of a recession.

With stock prices in the S&P 500 slumping 17% below the all-time highs of 2021 and the NASDAQ down 30% over the same period, analysts across the financial markets have mixed opinions on which direction the global economy will go. The International Monetary Fund predicts that although global growth will continue through 2023, the rate has slowed significantly (from 6% in 2021 to 2.7% projected for 2023).

While 2023 brings a lot of uncertainty, there will be lots of great opportunities for banks, brokerage firms, investment houses, family offices, and financial advisors to bring value to their clients. Some tried and true strategies will continue to be relevant this year while other new techniques will be required to keep your clients’ portfolios healthy and growing.

1. Growth Investing

Historically, there is a lot of money to be made through growth investing. Economic challenges and recessions have a way of stimulating new needs and opportunities. Growth investing is expected to remain a strong strategy for 2023. Financial advisors would be wise to look for new and up-and-coming firms that are positioned to take advantage of growth that typically follows a downturn.

The biggest challenge with growth investing is finding the “unicorn” in the crowd. Having sufficient resources to analyze a large number of young companies is impossible through standard fundamental analysis. Leveraging AI-powered research will enable investors to quickly and efficiently spot emerging companies that are likely to generate massive amounts of capital gains.

2. Value Investing

Value investing, another traditionally sound investment strategy, will also remain relevant in 2023. Numerous blue-chip companies, especially those in the tech space, have fallen in value dramatically over the past year. This will create opportunities to find undervalued companies with otherwise strong performance and financials.

Too many investors fail to conduct a proper peer analysis on the global level. For example, when comparing peers, they may focus only on US-based companies. A global view will provide a much better idea of how the company is actually performing in the global marketplace. Of course, this presents a couple of challenges. First, the investor needs to have deep industry knowledge to identify all of the players in the space. Also, this increases the need to analyze a larger group of companies. Fortunately, AI-powered equity research can solve both of these problems.

3. Universe of Securities

Financial advisors in 2023 may need to focus more on niche segments of the market to find the best investments for the clients. While standardized indexes do provide some level of comparison, they can span multiple industries, are limited to one geographic market, or cover a group of loosely related firms.

A universe of securities is a great solution to this problem, by letting investors create their own personalized indexes that track a selected peer group of companies. For example, if your client is interested in holding companies that specialize in lithium production, a customized universe focused on lithium miners and processors would be more effective than a generic index filled with rare mineral mining companies.

Maximize Gains Through AI-Powered Stock Analysis

Whether your client is focused on growth investing, value investing, or a combination of the two, speed is critical in maximizing gains. That’s why the experts at Deshe Analytics have created one of the most powerful and accessible AI platforms on the market. Our goal is to give financial advisors and investment houses the tools they need to rapidly analyze investment opportunities for their clients without dedicating a large number of resources.

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