Money managers are hopeful about the stock market in 2023. How they plan to invest

Money managers are hopeful about the stock market in 2023. How they plan to invest

Traders on the NYSE floor, October 7, 2022.

Source: New York SE

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Despite this year’s market chaos, investors are heading into 2023 fairly optimistically, according to a new investor survey from CNBC Delivering Alpha.

Four out of 10 predict that the S&P500 will increase by 6% to 10% next year. Almost 2 out of 10 call for gains between 11% and 19%. Meanwhile, 6% want stocks to rise more than 20%, which would erase this year’s losses from the S&P 500, which is expected to end 2022 19% lower.

We asked around 400 chief investment officers, equity strategists, portfolio managers and CNBC money managers about where they stand in the markets in the new year. The survey was conducted in the last week.

Risk in 2023 and the Fed

Almost half of respondents are optimistic that the Federal Reserve can orchestrate some kind of “soft landing” for the economy if the central bank continues to hike interest rates. Indeed, earlier this month policymakers hiked interest rates by half a point to a 15-year high.

Remarkably, when asked what their top concern about the market was, a staggering 73% of the participating wealth managers said it was Fed policy.

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CNBC Delivering Alpha Investor Survey

In second place was a Chinese invasion of Taiwan. Nine percent of participants said labor and utility issues were their top fear. Meanwhile, 6% reported a massive resurgence of Covid, which is currently wreaking havoc in China.

Inflation and the investment environment

About 4 out of 5 participating wealth managers predict that inflation will continue to ease in the new year.

Key investment themes are also emerging for 2023, with 72% of respondents saying they will focus on value rather than growth in the new year. Energy stocks will continue to be among investors’ favorites in 2023, with 41% of respondents saying they will be focused. Respondents were evenly split between high-yield stocks, financials and healthcare companies, with 31% favoring each of these categories over the coming year.

Respondents were also asked which of these five famous stocks they would buy for 2023: Amazon, alphabet, Tesla, Netflix and Meta. The overwhelming winners were Amazon and Alphabet at 37%. Tesla received 17% of the vote, with Netflix and Meta rounding out the list.

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All five of those names were knocked down in the past year. In recent months, however, Netflix has recovered somewhat. The streaming giant’s shares are up 63% over the past six months, but they’re still down 51% for the year.

At Tesla, 61% of participants said they were losing confidence in the stock and in the company’s CEO, Elon Musk.

Finally, don’t expect wealth managers to embrace cryptocurrency wholeheartedly in the new year: 81% said they wouldn’t touch it.