Following a strong first half of 2023 for equity markets, the third quarter offered something of a reality check as investor sentiment and the market narrative flip-flopped again. In Q2 investors believed that the Fed was on a clear flight path to a soft landing for the economy, and an end to policy tightening. That narrative hit a severe crosswind in August and September, with the prospect of rates staying higher for longer.. Both bonds and stocks fell while commodities were the notable outperformer over the quarter.
2023 continues to challenge investors, but we believe that are closing in on the answers the market seeks, and that will provide clearer guidance on the direction of the global economy. This stage of the market cycle is always a challenge for investors, as returns become hard to obtain, but history shows us that the best returns always come after a period where many have given up hope that they will see positive returns. At these times the smart investor reaps the reward of staying invested and following Warren Buffet’s oft repeated aphorism to “be fearful when others are greedy, and greedy when others are fearful”.
