After a difficult 2022, many investors want to hear about what they can expect in the year ahead.
Hear from our North American equity investment specialists as they sum up 2022 and share their views on what they’re optimistic about for 2023 in the following seven-minute video.
Here are a few high-level highlights from our video :
Blair Setford
Vice-President Product Management
IPC Portfolio Services
Our investment specialists are entering 2023 with both concern and optimism. Central bank efforts to curb inflation are beginning to take hold. The main concern for many at this point in the rate cycle is whether the Fed will make a policy error by hiking rates too far for too long. While an ongoing concern, the consensus amongst our investment specialists suggests we should expect a mild recession in the first half of 2023 that should prove to be short-lived.
Looking forward, we expect our portfolios to return to either neutral or overweight positions in equities in the second half of 2023. Fixed-income markets are looking good and will regain their ability to buffer portfolios from the excesses of the equity markets in the coming year. Investors will need to be patient as the markets continue to work through the fallout from today’s inflationary environment while remaining well-positioned for a new phase of growth, which we believe will begin in the second half of 2023.
David Picton
Picton Mahoney
Mandate: Canadian Growth Equity
After a challenging start to the year, Picton Mahoney believes the markets are shifting from worries about inflation to concerns about a recession. The shift is expected to bring more turmoil to the marketplace, which may cause the markets to retest recent lows. The good news is that David believes we are well on our way through the adjustment process required to bring inflation back under control. When the Fed pivots to lower rates, he believes the markets will surge making the pain of 2022 worthwhile. This shift will likely mark the beginning of a new commodities cycle and believes that companies that generate sustainable earnings growth are well positioned to be rewarded.
Sam Baldwin
Guardian Capital LP
Mandate: Canadian Equity
While Guardian feels the short-term outlook is negative, they see opportunities arising in terms of valuations. Guardian invests in quality companies that are resilient and whose valuations can surge during recovery and may emerge stronger after the downturn. Sam feels that valuations are currently low in Canada relative to other markets, suggesting future outperformance for Canadian equities. Guardian is currently underweight in the energy sector and sees future opportunities in consumer and technology stocks.
Pat Palozzi
Beutel Goodman
Mandate: North American Equity
Increased volatility in 2022 provided opportunities for Beutel Goodman to actively invest in strong companies that have been on their radar for a while. Beutel employs a very disciplined approach to finding securities that are trading at a significant discount to their intrinsic value, generate good cash flow, and are mature having survived challenging periods before. This in-depth process helped provide downside protection in 2022. They are currently underweight energy and are seeking out opportunities in stable businesses and cyclical companies with strong cash positions.
Dave Aspell
Mount Lucas
Mandate: U.S Value Equity
Mount Lucas is looking for a rebound in economic activity that includes the opening of China. Dave believes there is a considerable runaway ahead where industrial activity will support economic growth, jobs, and wages and believes we will likely see this in the second half of 2023. He is currently excited about the opportunities held within the portfolio as well as today’s “target rich” environment where commodities and industrial stocks appear cheap by historical standards. Dave sees a bright outlook for 2023 as global economies exit the constraints imposed by the COVID pandemic at full speed.