Last year was a rough one for equity markets around the globe, and the ASX wasn't spared. The S&P/ASX 200 Index (ASX: XJO) plummeted more than 5% last year as key Wall Street indices entered bear market territory.
Fortunately, the tide appears to have turned in 2023, with the ASX 200 lifting 7% year to date.
And while pressures dragging on stocks haven't yet abated, experts at ANZ Group Holdings Ltd (ASX: ANZ)'s private banking business appear optimistic there will be "ample opportunity" among ASX shares this year.
ANZ Private Banking head of investing strategy Lakshman Anantakrishnan commented on the bank's 2023 Global Market Outlook, released yesterday, saying:
With challenges but also potential across most sectors in 2023, for investors, remaining nimble within portfolios might be most important of all. But there will be opportunities.
Here's how the bank advises investors to dodge potential challenges to make the most of the new year.
A better year is upon us: ANZ
Inflation, growth concerns, and potential recessionary impacts will likely dint shares, including those on the ASX, this year as earnings look set to reflect the challenging environment. But ASX investors might find respite amid such struggles, according to Anantakrishnan. He said:
2023 will be hard pressed to outdo the challenges that financial markets faced in 2022, however this year is unlikely to be a smooth ride for investors …
Unlike 2022 there should be ample opportunity for investors this year — where and when remains the question.
The bank tips inflation to moderate as supply chains normalise as well as for China's reopening to aid manufacturers and, hopefully, help Australia dodge a recession.
In a less positive vein, the impact of successive rate hikes should catch up with companies and consumers, lessening demand.
It tips shares to "test a new bottom" before any sustained rally occurs.
How might ASX investors make the most of 2023?
On that note, the first half might be rough for those invested in the market as consumers reject rising costs, thereby putting pressure on companies' margins and potentially dinting valuations.
But, as the bank notes, back-to-back annual falls are a market rarity. That means the ASX's 2022 tumble has likely set the stage for a recovery.
ANZ tips ASX shares to gain 8.2% annually between 2022 and 2032 and prefers the look of Aussie stocks over their New York-listed peers in 2023. Thus, the future appears bright for ASX investors.
Though, the current half could be a bleak one, according to ANZ, with the bank favouring bonds over shares in the period. Anantakrishnan continued:
We would look for any sell-off prior to an eventual pivot as an opportunity to build back equity exposure.
Conversely, any rallies in H1 are likely to be taken as further opportunity to reduce equities, before building back exposure once they have bottomed.
