Citi Global Wealth Investments Issues Mid-Year Wealth Outlook 2023 - Opportunities on the Horizon

Investing Through a Slowing Economy

Citi Global Wealth Investments today released its Mid-Year Wealth Outlook 2023 report - Opportunities on the Horizon: Investing Through a Slowing Economy. This biannual report sets out Citi Global Wealth’s outlook on how investors should approach developments in the global economy, markets and geopolitics.

Though 2023 has been full of extraordinary events, Citi Global Wealth sees the remainder of the year as an opportunity. We are in a “rolling recession” where parts of the US economy are growing even as others contract. As inflation slowly eases following a period of rapid Fed rate hikes, the group believes that keeping portfolios invested is imperative. While the current asset allocation strategy remains defensive, Citi Global Wealth see numerous opportunities to adjust their portfolios over time, as the Fed shifts from interest rate hikes to cuts.

We believe that current markets will lead into a meaningful potential recovery in 2024.

“Though the broader bear market is not yet over, we are seeing significant valuation improvements in certain sectors that provide our clients with the potential to invest in higher income-generating assets and long-term growth opportunities,” said David Bailin, Chief Investment Officer at Citi Global Wealth. “Our wealth outlook for the remainder of 2023 and heading into 2024 suggests that clients may benefit most from a return to what we call ‘core investing’ – full invested portfolios that move from defense to offense, from more bonds to more equities, from US-focused to global. We favor investing in select non-U.S. equities, identifying value within U.S. markets, broadening tech and growth equity exposures and emphasizing alternative investing and private credit for suitable investors with a longer time horizon.”

Bonds are Back Again: Sustaining Income as Rates Peak

Citi Global Wealth believes that it is time for action in the fixed income space. Investors holding short term investments can seek to extend their income by extending duration. There are also many potential opportunities to diversify bond portfolios, add to duration, diversity risk and earn potentially higher yields. And private credit can add significant yield as banks retrench. Best of all, bonds will now provide the diversification benefits they lost temporarily in 2022.