2023 Year in Review

2023 has been an eventful year of interest rate hikes, inflation holding on and market volatility. We recap on the changes we have made to client portfolios and what next year might look like.

The Market Cycle

With interest rates likely to remain at this higher level for longer, our place in the market cycle is changing. This article explains how we can take advantage of this new phase and seek investment opportunities.

Learn about fixed income and bonds.

The term ‘bond’ is used to describe several different types of financial products. In this article we explore bonds in the context of the ‘fixed income’ element of a balanced investment portfolio.

Higher for longer.

Until recently markets were anticipating interest rate cuts by the middle of next year. While the peak in rates is likely to be soon, the stubbornness of inflation has now caused the market to put these rate cuts much further out, causing turbulent bond markets to grasp the headlines.

Rate rises by the Fed and BoE on pause.

The US Federal Reserve raised interest rates yesterday as expected, but the Bank of England paused, leaving interest rates unchanged. This might bring into question the BoE’s credibility around the fight against inflation.

Fixed income emerges from the doldrums.

Following the 2008 financial crisis and the pandemic, interest rates had been stuck at close to zero in the major economies for years. This made bond markets - rates on longer term loans - very unattractive. Interest rate rises over the last 18 months may have changed this.

Post-Covid markets in the context of the last two decades.

As policy makers now deal with an inflationary environment after years of fighting deflation, higher interest rates will lead to a different market backdrop.