Here’s our mid-year investment update, where we take the opportunity to administer a dose of “investing vitamin C” to ourselves and, we hope, to you.
We’re even more delighted than usual to look back at the events that unfolded in the first half of 2023. But first, a brief reminder of our investing principles.
The ideas that guide our investment philosophy
- We encourage clients to be long-term, goal-focused, planning-driven owners of broadly diversified portfolios of enduringly successful companies (also known as equities or shares). As such, you should act continuously on your financial plan, as opposed to reacting episodically to current events and conditions.
- We’re convinced that the economy cannot be consistently forecast, nor the market consistently timed. We take from this that our best chance to capture something close to the full long-term return of equities is to ride out their frequent, sometimes significant, but historically always temporary, declines.
- These will continue to be the mainstay convictions that inform our investment policy, as we help our clients to pursue their most cherished financial goals.
How global equities performed between January and June 2023
After declining sharply for most of 2022, global stock markets ended the year down more than 15% (for example, the MSCI World Index was down 17.96%).
As the year turned, it seemed as if the global economy might well be in a no-win situation.
Either central banks would tighten credit conditions enough to stamp out inflation, thereby pushing economies toward a recession. Or, they would relent, avoiding recession but permitting inflation to remain high. In either case, we were assured that corporate earnings must be about to decline significantly, boding ill for “the stock market.”
To this apparently difficult economic situation, the first half of 2023 added a few new and potentially critical uncertainties:
- The spectre of US sovereign default (again)
- A wave of US bank failures that seemed to threaten the banking system itself
- A renewed outbreak of fear surrounding the ongoing conflict in Ukraine and its economic consequences for Europe.
Yet after enduring these simultaneous challenges, real and imagined, the MSCI closed out the first half of 2023 up 14.26%.
We’re almost tempted to say, “You read that right,” and leave you to draw your own conclusions. Instead, we’ll just repeat renowned investor Peter Lynch’s timeless maxim: “The real key to making money in stocks is not to get scared out of them.”
In that sense, the first six months of 2023 remind us, once again, that the best thing you could have done amid well-nigh universal pessimism was not to get scared out.
Instead, stay focused on your goals and on your long-term plan. Have confidence that the managers of the great companies of the world will continue to look after their shareholders’ capital with diligence, while they seek out new and potentially greater opportunities amid the adversity.
In summary, everything that happened (and didn’t happen) in the first half of 2023 turned out not to matter much.
What mattered was that those who chose not to react did the right thing. Is it possible that a lifetime of patient, disciplined investment success is just that simple? We certainly believe it can be.
Contact us to meet financial planners who take a long-term view of your financial goals
To talk more about nurturing your long-term investment goals, email us at clients@iqf.ie, or call 353 71 915 5560.
Please note
This article is for information only. It does not constitute advice.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Charges
iQ Financial mid-year investment commentary 2023
Here’s our mid-year investment update, where we take the opportunity to administer a dose of “investing vitamin C” to ourselves and, we hope, to you.
We’re even more delighted than usual to look back at the events that unfolded in the first half of 2023. But first, a brief reminder of our investing principles.
The ideas that guide our investment philosophy
How global equities performed between January and June 2023
After declining sharply for most of 2022, global stock markets ended the year down more than 15% (for example, the MSCI World Index was down 17.96%).
As the year turned, it seemed as if the global economy might well be in a no-win situation.
Either central banks would tighten credit conditions enough to stamp out inflation, thereby pushing economies toward a recession. Or, they would relent, avoiding recession but permitting inflation to remain high. In either case, we were assured that corporate earnings must be about to decline significantly, boding ill for “the stock market.”
To this apparently difficult economic situation, the first half of 2023 added a few new and potentially critical uncertainties:
Yet after enduring these simultaneous challenges, real and imagined, the MSCI closed out the first half of 2023 up 14.26%.
We’re almost tempted to say, “You read that right,” and leave you to draw your own conclusions. Instead, we’ll just repeat renowned investor Peter Lynch’s timeless maxim: “The real key to making money in stocks is not to get scared out of them.”
In that sense, the first six months of 2023 remind us, once again, that the best thing you could have done amid well-nigh universal pessimism was not to get scared out.
Instead, stay focused on your goals and on your long-term plan. Have confidence that the managers of the great companies of the world will continue to look after their shareholders’ capital with diligence, while they seek out new and potentially greater opportunities amid the adversity.
In summary, everything that happened (and didn’t happen) in the first half of 2023 turned out not to matter much.
What mattered was that those who chose not to react did the right thing. Is it possible that a lifetime of patient, disciplined investment success is just that simple? We certainly believe it can be.
Contact us to meet financial planners who take a long-term view of your financial goals
To talk more about nurturing your long-term investment goals, email us at clients@iqf.ie, or call 353 71 915 5560.
Please note
This article is for information only. It does not constitute advice.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Get in touch
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