Quarterly Market Update: Q1 2023
Welcome to Balance: Wealth Planning's first Quarterly Market Update of 2023.
Throughout this year, our financial planners will collate important market information that occurred within each quarter, which we will then share with you.
Each quarterly update will contain a market review of the last three months, with any announcements or trends. As well as a review of our portfolios and how they have performed in the last three months. And finally, the long-term view of the financial market.
So, without further ado, please enjoy!
Introduction to our quarterly updates
Here is Declan Gamble, one of our financial planners, introducing the first in our series of quarterly market updates for 2023.
Below we will look in more detail at what’s happened in the banking sector, what impact this has had on the bond market, the new sustainable framework in the finance sector, and technological advances.
Market Review
Both equities and bonds were broadly positive over the quarter, although volatility remained elevated as several headline-grabbing news stories occurred.
We saw Silicon Valley Bank (SVB) collapse spook investors in March as fears of another banking crisis rose. However, it is clear to see that lessons have been learnt from the financial crisis in 2008. We saw equity markets start to recover as the fear of another banking crisis subsided, and central banks stepped in to protect customers.
On the Sustainable Investment side of the market, in February the British Standards Institute launched an ISO standard to provide a framework to which the finance sector can align its sustainability efforts.
Outside of the market news, headlines have been dominated by ChatGPT. We’ve seen the platform solve coding issues within seconds and write an entire novel within a day. It’s going to be fascinating to see how things develop in this space over the next several years.
Portfolio Review
All our portfolio range finished the quarter in positive territory, as both bonds and equities recovered from the initial downturn in later February on the back of the concerns in the banking sector.
Over the longer term, our portfolios across the risk range continue to perform in-line with expectations and generate positive returns over a five-year period.
Our long-term view
So far, Q1 has shown that after a difficult 2022, both bonds and equities can deliver positive returns despite a lot of market noise.
It is important to plan for the possible range of returns, and by having a highly diversified portfolio across sectors and geographies, such as our Balance Wealth Core portfolios, you are never too exposed to one particular stock, sector or geography.
The market continues to hold all the answers as it provides an analysis of the forward expectations of market participants.
All prices today include inflation expectations, interest rates and economic growth in the future. While there will be many periods of volatility with lots of newsworthy events, markets will continue to strive for positive returns over the long term as market participants continue to have positive future expectations.
Please note: This update is provided for information only, and you should not take any action before speaking to a Financial Planner, who will confirm what suits you. In addition, past performance is not a guarantee of future returns. Values can fall and rise – you may get back less than you have invested.
Please feel free to share it with anyone who may be interested. If you have any questions, please get in touch with your usual contact or investments@balancewealth.uk.