As we turn the page on a historic and difficult year for investors, it is helpful to reflect on what has changed recently and what remains the same. The reopening of the Chinese economy, which we expect to lend support to global growth and inflation in 2023, is the biggest new development, followed by a switch in focus by the Fed away from headline inflation and supply chains and towards the state of the labor market. Valuations are also more attractive across the capital markets, a long-term positive for investors. But our view that the Fed remains a single mandate central bank, firmly focused on eradicating inflation and not on supporting economic growth, remains unchanged, as does our assessment that volatility across the interest rate complex is still too high for comfort.
Synthesizing it all, the investment team is maintaining our conservative stance, favoring value and dividend stocks and higher-quality fixed income, but we are looking to selectively increase portfolio risk where we see changing dynamics underappreciated by market participants. Horizon appreciates your business and trust through this unprecedented time in markets and the global economy. We look forward to continuing to help our clients meet their financial goals in the years ahead.
Past performance is not indicative of future results. The investments recommended by Horizon are not guaranteed. There can be economic times when all investments are unfavorable and depreciate in value. Clients may lose money. This information should not be considered to be a recommendation to buy or sell any security or to adopt a particular investment strategy. Any information about performance, allocations, and contributors and detractors is illustrative of Horizon’s model strategies and is therefore hypothetical and not representative of any specific account. It should not be assumed that any of the transactions, holdings, or sectors discussed were or will be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance discussed herein. Opinions referenced are as of the date of publication and may not necessarily come to pass. Forward looking statements cannot be guaranteed. We do not intend and will not endeavor to provide notice if and when our opinions or actions change. References to indices, or other measures of relative market performance over a specified period of time are provided for informational purposes only. Reference to an index does not imply that the any account will achieve returns, volatility or other results similar to that index. The composition of an index may not reflect the manner in which a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change. Information obtained from third party sources is believed reliable but has not been vetted by the firm or its personnel.
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