1、2023 OUTLOOK Published December 7,2022Introduction2022 has been a difficult year for investors.Equity and bond markets have experienced double-digit declines amid stubbornly high inflation,slowing economic growth,and the war in Ukraine.Recessions in the United States and euro area look increasingly

2、likely in 2023,while the United Kingdom appears to already be in recession and Chinas economy has stalled.Risk assets and bonds may still have some downside given these challenging conditions.Yet as we say good riddance to 2022,we recognize that at least this past year left us with better valuations

3、 that may eventually lead to good long-term returns.In periods of market stress,many investors may be best served by focusing on three core activities.First,investors should understand what they own and stress test portfolios to ensure adequate liquidity to meet liabilities,capital calls,and other o

4、bligations.Second,investors should consider opportunities to better diversify portfolios.2022 showed the importance of diversification beyond traditional equities and bonds.Many investments,including sovereign bonds,now offer reasonable return and diversification potentiala rare combination in recen

5、t years.Finally,investors should look for investment opportunities in markets that have seen significant stress.These markets may also provide opportunities to upgrade manager rosters.In the next pages,we highlight our expectations for 2023.While events will undoubtedly diverge from these expectatio

6、ns to some extent,we are sure of one reality.Thoughtful deci-sionsnot rash actionsduring chaotic environments are what separate top-performing investors from everyone else.OUTLOOK 2023AN OVERVIEW OF OUR 2023 VIEWSOur investment views are rooted in an expectation that the cyclical backdrop will remai