10 Bold Investing Predictions for 2023

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  • The year 2022 is likely to go down as the worst year for stocks since the 2008 financial crisis.
  • The New Year brings hope that things will turnaround for equities in the coming months.
  • With 2023 on the horizon, we offer 10 bold investing decisions for the year ahead.
investing predictions for 2023 - 10 Bold Investing Predictions for 2023

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2022 won’t be remembered fondly by investors. As the year draws to a close, all the major indices are deep in the red, with the S&P 500 and Nasdaq each down more than 20% and officially in a bear market. War in Ukraine, volatile energy prices, ongoing Covid-19 lockdowns in China. Then, there’s the highest rates of inflation in 40 years, and rising interest rates have conspired to push equities lower. In fact, 2022 is likely to go down in the history books as the worst year for stocks since the 2008 financial crisis. If there’s a silver lining to be found, it is that the year is coming to an end and we can now look forward to 2023. So, what can we expect in the New Year? Here are 10 bold investing predictions for the coming 12 months.

Gold Prices Rise To $4,000 An Ounce

An image of a rising bar graph on top of gold bars, representing gold stocks
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Suddenly everyone is bullish on gold. With cryptocurrencies imploding, stocks sinking, and inflation stubbornly high, investors rediscovered gold. Consequently, the price of gold has rallied 4% higher in Dec., moving in the opposite direction of other investment vehicles.

Now, some analysts are forecasting that the price of gold will more than double in 2023, jumping from its current price of just under $1,800 to $4,000 an ounce. Boosting the price will be central banks around the world, which, according to the World Gold Council, have bought 400 tonnes of gold in the third quarter of 2022 alone, almost doubling the previous record of 241 tonnes bought Q3 in 2018. While a move to $4,000 an ounce would be extraordinary, it is not out of the realm of possibility. Especially if inflation remains elevated and central banks continue raising interest rates throughout 2023.

Bitcoin Price Falls Below $15,000

gold bitcoin on 100 dollar bill
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Despite all the bankruptcies and failures in cryptocurrencies, most notably the $8 billion collapse of the FTX exchange, Bitcoin (BTC-USD) has held up remarkably well. Since FTX officially filed for protection, Bitcoin has traded in a tight range of between $16,500 and $17,500, much to the surprise of analysts who expected the price to crater.

Bitcoin has fallen 65% in 2022 and is down 75% since peaking at $68,000 in Nov. 2021. Where will the price go from here? With contagion from the FTX collapse continuing to spread and the number of cryptocurrency firms filing for bankruptcy accelerating, it’s a good bet that the price of BTC will fall further in 2023. While many analysts are calling for Bitcoin’s price to drop below $10,000 in the New Year, that type of decline seems aggressive. However, it is plausible that BTC could drop below $15,000 in coming months. Especially if another big player such as Binance or Coinbase (NASDAQ:COIN) fail.

Jeff Bezos Returns To Run Amazon

Jeff Bezos
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Things keep going from bad to worse with Amazon’s (NASDAQ:AMZN) stock. The share price is down 50% as 2022 draws to a close with no bottom yet in sight. At $83 a share, the stock has given up all the gains it achieved during the pandemic. And while the share price decline presents a great buying opportunity, how long will shareholders remain patient? A growing chorus of analysts and investors are calling for Amazon founder and long-time chief executive officer (CEO) Jeff Bezos to return and rescue the e-commerce giant in 2023. Bezos’ return is not without precedent. Former CEO Howard Schultz returned to helm Starbucks (NASDAQ:SBUX) this past year, and Bob Iger recently returned to lead Walt Disney (NYSE:DIS) as its stock also nosedives.

Bezos’ return to lead Amazon would be smoothed along by the fact that he remains executive chairman of Amazon’s board of directors.

Twitter Gets Sold — Again

Elon Musk joins Twitter.
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How committed is Elon Musk to the social media company he bought at the end of Oct. for $44 billion? We know he tried to get out of the acquisition, sold a lot of Tesla (NASDAQ:TSLA) stock to complete the purchase, and has caused a fair amount of chaos at Twitter in the first few months. Now, Musk has announced he plans to step down as CEO of the company. Could Musk throw in the towel completely and sell Twitter? It’s not out of the realm of possibility, especially as Musk is under increasing pressure to return his focus to Tesla, the electric vehicle company he also runs, and whose share price is down 68% in 2022. Other companies have been rumored as potential buyers of the social media platform, including Salesforce (NYSE:CRM), Microsoft (NASDAQ:MSFT) and Disney.

Crude Oil Prices Rise Above $100 A Barrel

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Oil prices are volatile and unpredictable. After peaking at $122 a barrel this past June, West Texas Intermediate crude oil declined to right around $70 a barrel at the start of Dec. Since then, the price has recovered and moved back close to $80 a barrel. The rise in crude prices made oil stocks the lone standout in an otherwise dismal year for equities. So what to expect in 2023? With war continuing in Ukraine, an energy crisis building in Europe this winter, and China wrestling with Covid-19, crude oil prices remains difficult to forecast. However, there’s a good chance that prices will rise back to $100 a barrel or higher, at least in the near-term winter months. This is especially likely if China finally ends its “Zero Covid” policy and energy demand in the nation of 1.4 billion people spikes.

The IPO Market Remains Depressed

A hand touches a digital chart with the text "IPO."
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The market for initial public offerings (IPOs) fell off a cliff in 2022. After a record-breaking 2021, the global IPO market declined 61% to $179.5 billion in capital raised during 2022. The stock market downturn pushed many companies that want to go public to the sidelines. Notable names such as e-commerce company Stripe and social media giant Reddit were forced to cancel their highly anticipated IPOs.

Will things rebound in 2023? Not likely. With markets expected to remain volatile, at least during the first half of the year, it is a safe bet that companies will continue to wait for improved conditions before holding their IPO. The bigger the company, the more likely they are to want to hold their IPO under optimal conditions.

Fed Pivot Happens Sooner Than Expected

The Federal Reserve System logo with USA flag. known as the Federal Reserve or The Fed. is the central banking system of the United States of America.. Jerome Powell
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Stocks continue to be weighed down by stubbornly high inflation that is currently at an annualized 7.1% in America and well above the U.S. Federal Reserve’s 2% target. Expectations are that the U.S. central bank will continue to raise interest rates. All in an effort to cool inflation and bring it substantially lower. Economists and investors are trying to figure out when the Fed will pivot from its current path of monetary tightening and stop raising rates.

While some economists are forecasting that the Fed will stay on its interest rate hiking path until summer 2023, there is a high likelihood that the central bank’s pivot could happen earlier in the year. With crude oil prices slumping below $80 a barrel, there is a good chance the December inflation reading will come in lower than expected. Also, growing signs that the U.S. economy is slowing could give the Fed reason to pause its rate hike cycle as it tries to orchestrate a “soft landing.”

The next Federal Reserve meeting is scheduled to take place from January 31 to February 1. Look for the Fed to raise interest rates by only 25 basis points (one quarter of a percentage point) at that meeting before pivoting away from its current monetary policy tightening regime.

Tech Stocks Rally (In Second Half)

A hexagonal grid with different tech-related icons; Tech stocks illustration
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How low can they go? Technology stocks have been harmed more than most in the 2022 selloff. And a number of traditionally reliable growth stocks such as Amazon, Alphabet (NASDAQ:GOOG / NASDAQ:GOOGL) and Meta Platforms (NASDAQ:META) are each down more than 40% on the year. Stocks of cybersecurity, semiconductor and cloud computing firms are down even more. The good news is that many analysts who cover the technology sector expect a big rebound in 2023. Some analysts are forecasting that tech stocks will rise 20% of more in the year ahead, leading all equities higher once the market bottoms. If true, now might be the time for investors to buy into technology names at 52-week lows.

Cryptocurrencies Are Regulated

Crypto coins on a phone screen showing stats for various cryptocurrencies.. Cryptos to Watch
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Whether it is the U.S. Securities and Exchange Commission (SEC), the Commodities Future Trading Commission (CFTC), or another agency, cryptocurrencies are likely to be subject to regulation in 2023. Already there are several pieces of legislation working their way through Congress. Many could regulate crypto and seek to protect investors.

The determination to regulate crypto has only strengthened in the wake of the FTX collapse, where more than one million creditors are reportedly owed a combined $8 billion. In the wake of the FTX implosion, the SEC and lawmakers in Washington, D.C. have ratcheted up their language around regulation and promised to bring greater accountability to the world of digital coins and tokens.

The War In Ukraine Ends

An image of a global map highlighting Russia and Ukraine, dice with their respect flags
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There are already signs that Russia is prepared to negotiate an end to the war in Ukraine. Ongoing defeats on the part of the Russian military coupled with reports of a lack of equipment and issues related to Russian President Vladimir Putin’s health and political power point to an end to the conflict sooner rather than later.

Key to the war ending will be the ongoing support and resolve of the western allies that are backing Ukraine.. Ukraine’s President Volodymyr Zelenskyy was in Washington, D.C. before the holidays to thank the U.S. for its support and request more military aid. All indications are that the Biden administration will provide it.

While no negotiations to end the war have begun yet, there is hope of a negotiated peace. Should that happen, it would no doubt spark a relief rally in markets around the world.

Disclosure: On the date of publication, Joel Baglole held long positions in MSFT, GOOGL and DIS. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2022/12/10-bold-investing-predictions-for-2023/.

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