The Holidays bring lots of gifts, and one that we look forward to each year in the financial world is the upcoming year’s forecasts. On this week’s episode, Greg and Doug examine and discuss 2023 outlooks from several of the world’s largest asset managers. The guys take stock of a wild 2022, give their own predictions for next year, and debate how recency bias annually plays into these prognostications.
[04:21] - “After you've had these sorts of declines, typically the markets are positive when you look at one year, three years, five years, 10 years. So, if you're thinking about it just from a historical standpoint, you would want to be risk-on, and that means getting short-term on the bond side of the equation to the extent that you have fixed income exposure. And then you would want to have a higher allocation towards equities, because presumably if history is any guide, equities would outperform after these sorts of periods.” - Greg Stokes
[25:40] - “It seems like every year there's a certain level of uncertainty that exists that has never existed before. It's that recency bias that makes you fearful of taking any action from an investment perspective because so many things could go wrong. It happens every single year. That's why you have to have a long-term game plan investment-wise to take your risks with money that you can afford to lose and develop an investment strategy over a period of time longer than 2023.” - Doug Stokes
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