To sum up the year 2022, Russia’s invasion of Ukraine, together with shortages and bottlenecks driven by the pandemic shift in consumer spending, led to repeated inflation surprises that sent bond yields soaring, crushing equities and fixed income. That said, with estimates the world to grow at 1.7%, 2023 may be one of the slowest years for global growth in decades, to some extent driven by central bank tightening policies. Either to get inflation back to 2% targets by crushing demand down, or to live with more inflation.
For now, seems that they're all in the first choice, but as this fast hiking cycle finally hit the economy, many analysts believe central banks will stop their hikes despite inflation won’t be on track to get the so mentioned 2%. With a focus on high quality and long-duration equities, our portfolios suffered from higher rates and risk-off, even though our companies continued to strongly perform on a fundamental basis. It is clearly time to buy.
