Financial Doom and Gloom Got You Down? Here’s Where to Invest in 2023
Key takeaways
- Stock market dipped at Fed’s May interest rate decision, with some traders concerned share prices could see a correction
- Bonds and gold are performing better in 2023 and may be solid investment choices for your portfolio
- A diversified approach, helped by AI investing, is your best best in uncertain times
Recession. Debt-ceiling crisis. Banks collapsing. It’s all pretty worrying stuff, even for a seasoned investor. And knowing where to put your money this year has become even more of a guessing game.
Thankfully, there are some key principles to help guide you and your investments through economic uncertainty. Let’s take a look at the state of the stock market in 2023 and which alternative investments to consider.
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The stock market in 2023
Stocks have rallied again in 2023, but haven’t fully recovered the highs of their 2021 prices. And the Fed’s decision to increase interest rates in May hasn’t filled some traders with confidence: some think stocks are now too expensive, with the S&P 500’s forward price-to-earnings ratio sitting at 18.2 instead of its usual 15.6 average.
And even if Fed chair Jerome Powell doesn’t think a recession is going to happen now, he hasn’t necessarily convinced others. Citigroup predicted a mild recession by Q4 in a new report this week, while the US banking crisis reached new heights as regional bank PacWest was said to be weighing up a sale. Its shares have plunged 50% this week.
So, where should you put your money if the stock market isn’t looking too hot?
Alternative investments for your portfolio
Treasury bonds aren’t that sexy, but they’re a solid investment option for this year if recession talks are true. After the Fed’s May announcement, yields fell to 3.867% for the two-year Treasury and 3.364% for the 10-year Treasury.
Gold is a go-to investment option in times of economic uncertainty, so the price of gold usually rallies when whispers about a recession begin. And rallied it has: gold prices this week reached very close to their all-time highs from the summer of 2020, reaching $2,072.19. The precious metal has enjoyed steady gains in the last few weeks as central banks look to shore up their reserves.
The bottom line
So far the stock market has largely shrugged off recession worries, so there’s a chance its 2023 rally will continue. But if the US enters a recession, turning to ‘safe haven’ assets like bonds and gold is a good strategy for building a recession-proof portfolio. Plus, getting an AI to help you find the best deals on the market isn’t a bad shout either.
Want to get in on gold but don’t know where to start? Q.ai’s Gold Rush Kit is all you need to take advantage of rising gold prices. The AI invests in the gold-mining companies set to make returns each week, checking reams of data to determine the weightings. It’s all to help you grow your wealth and diversify your portfolio.
Download Q.ai today for access to AI-powered investment strategies.
