money Financial Outlooks for 2023 H appy New Year! It’s time to review the top investment stories of 2022 while provid- economy, it is not all bad news for seniors. For a change, health expen- ditures haven’t been one of the leading causes. And though rising interest rates have hurt bond prices, higher yields are now available on some investments.
these may have peaked in the near term, I think that rents will generally continue to rise. The policies of this administration are inflationary. Overspending and disincentives to work have created shortages, while the government’s approach to energy and other natu- ral resources has resulted in underin- vestment in supply. Notwithstanding recent declines in gasoline prices, I think commodity prices will likely rise for the next several years. This is exacerbated by commodity supply shortages resulting from the war in Ukraine. Unfortunately, I don’t see the war ending soon. On the other hand, China is beginning to relax its policy of COVID-related shut- downs. This should both spur global economic demand and, unfortu-
ing my outlook for 2023. I’ll focus the majority of this article on inflation, my top economic story for 2022. But in doing so, I’ll discuss factors that will broadly impact 2023. Other stories include the ongoing war in Ukraine and China’s shutdowns associated with its “zero-COVID” policy. Nega- tive investment returns are their own story. I won’t discuss the US midterm elections. While the ramifications are clearly significant, from an invest- ment perspective, the impacts are likely to be small in 2023. Inflation in 2022 was at a multi-de- cade high and is likely to persist, albeit not at the highest levels we’ve recently witnessed. Although infla- tion has a corrosive effect on the
The Fed is trying to control inflation by tamping down demand. However, as a result, businesses have become cautious with respect to investments and inventory. Reduced supply largely offsets any price weakness that might occur as a result of limiting consumer demand. In the current environment, interest rates have soared, making homes less affordable. Volume and prices have fallen from their peak levels, especially as speculators have left the housing market. However, a lack of affordable housing has trans- lated into rapidly rising rents. While
38 • AMAC Magazine
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