Expert reveals best time to buy shares in 2023

But even he warns investors against trying to time the market and calls for 'a disciplined approach'.

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Despite the perils of predicting the bottom, one expert has stuck his neck out to tell investors when would be the best time to buy stocks in the coming year.

DeVere Group chief executive Nigel Green reckons that the "peak opportunity" for investment will come in just a few weeks — late in the first quarter.

"Until then, unemployment will be rising and there will still be aggressive language from the central banks on the need to stamp out inflation, which by then will be sharply down from current levels," he said.

"This is, perhaps, when stocks will reach their cyclical bottom, and when investors might be rewarded for taking the plunge."

The stock market is always forward-looking, so Green warned that inflation will likely still be raging at this point.

"It will still be well above the 2% target set by the central banks."

Why stock prices could explode in the second quarter

Green predicts that by the second quarter, risk assets like stocks will have already priced in "a cyclical upturn" in the G7 economies.

"The assets that have fallen hardest between now and then may be the strongest performers during this recovery rally, with the best performing days probably at the start," he said.

"There will be cyclically sensitive sectors, such as industrials, consumer discretionary and autos."

The catalyst for these returns could be the central banks ending interest rate hikes and an "easing of rhetoric on inflation".

"As it slowly makes its way down to the 2% target rate in the major western economies, companies [are] cutting back fast, together with signs of economic stabilisation."

Don't try to time the market though

Despite his own bold predictions, Green warned investors against trying to pick the bottom.

"Holding cash is tempting, but it suggests an ability to 'time the market' — to invest it at an optimum point in the cycle — and this is nearly always impossible," he said.

"Investors should be starting to position themselves for the cyclical upturn."

Green also urged portfolios should remain diversified and investors should take "a disciplined approach to putting money into the markets that ignores current trends".

"There is no 'right way' to approach investing, since each individual's attitude to risk, and time horizon, differs."

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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