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My predications for 2023

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Investing is a game of probability, not certainty.

Nothing is ever guaranteed. Unknown unknowns lurk around every corner, and the game is always changing.

However, while you will never be able to predict exactly what’s going to happen in the future, current data does shine a light on what lies ahead for markets in 2023.

Here is my summarised view on the most probable direction for markets in 2023 and how to position your portfolio accordingly.

Inflation vs. recession

In my view, an overly aggressive Central Bank policy will lead to a painful period for stocks as company earnings and nominal growth falls, bringing the US into recession. This will force a necessary pivot from the Central Banks, creating buying opportunities in equities that will have already front-run the economic contraction ahead.

Stocks

As with 2022, stocks which provide an attractive income appear more reasonably valued. Investors remain less likely to fund the growth story of pre-earnings companies as a potential recession looms.

Any overall underweight to stocks in the first half of the year with a material tilt towards companies with strong and stable balance sheets should provide portfolio resilience.

More specifically, financials (Net Interest Margin improvement and balance sheet strength) and healthcare (ageing population demographics) are preferred from a sector standpoint.Bonds

The brutal repricing that came as a result of the Federal Reserve’s efforts to tame the inflation beast have brought short term treasuries back to between 4% and 5%.
For the first time in a long time, the rotation into bonds is an attractive trade. For risk-averse savers, this is a game changer as the endless search for yield is over.

I have increased my allocation to short-term Government bonds given the current interest rates on offer and uncertainties elsewhere.Real Estate

The ripple of weaker housing activity has already begun.
In the US existing home sales have dropped dramatically with November clocking the worst decline since February 2008 - down 28.4%.

This is hardly surprising given that we condensed 10-years of growth into an 18-month period as house prices jumped 40% since 2020.

While I believe there is more downside in the real estate market (~10%) as a result of the higher mortgage rate environment, the overwhelming lack of supply remains the most supportive factor. We simply didn’t build enough homes following the last housing crash to meet the demand coming from millennials reaching their household formation years.

This generational undersupply means ludicrous prices are here to stay, but the price surges we have experienced in recent years are over.What does all this mean for you?

It’s not all bad news. Valuations are in a much stronger position relative to this time last year. Once the earnings decline is fully reflected, long-term opportunities will emerge for those ready and willing to put their money on the table.

Until then, tactically chose a combination of short-term bonds and defensive equity sectors that can survive a challenging economic environment while still providing income to your portfolios. Brighter days are ahead, just not quite yet.

Now is the perfect time to set up your strategic long-term investment plan. Don't wait until the market has moved to think about your investments.

For those looking for independent investment consulting advice, please don’t hesitate to reach out.

Find my full list of 2023 predications on my website by scanning the QR code above. 

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Paralympic legend Jason Smyth visits St Brendan’s

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Paralympic legend Jason Smyth visits St Brendan’s


World renowned Paralympian and world record holder Jason Smyth paid a visit to St Brendan’s College on Wednesday afternoon as part of a high profile visit to Killarney.


The six time Paralympic gold medallist spoke to second year students from St Brendan’s College, alongside students from neighbouring schools St Brigid’s Presentation Secondary School and Killarney Community College.
The interactive talk and interview took place ahead of World Sight Day, with the legendary sprinter sharing his personal journey with Stargardt disease, a genetic eye condition that left him legally blind at eight years old.
The Derry native, who holds the world record as the fastest Paralympian on earth over 100 metres, offered inspiring insights into overcoming physical adversity and achieving success at the highest level of world sport.
The school visit formed the opening leg of his Killarney schedule before he took centre stage later on Wednesday evening at The Killarney Plaza Hotel & Spa.
Smyth headlined An Evening with Paralympian Jason Smyth, an event organised by the Killarney Chamber of Tourism and Commerce as part of its winter schedule, sponsored by AIB.

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Deerpark Retail Park placed on market for fifteen million euro

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Deerpark Retail Park in Killarney has officially been placed on the market with a guide price in excess of 15.4 million euro, excluding VAT.

International real estate firm Cushman & Wakefield has been appointed as the sole sales agent to handle the high-profile commercial property sale on behalf of its current owner, Investcorp.

Investcorp, a global investment management firm headquartered in Bahrain, had previously acquired the prominent shopping complex.


The sale represents one of the largest commercial property offerings to launch in County Kerry this year.

Located roughly 1.3 kilometres west of Killarney town centre, the scheme enjoys strong regional connectivity and sits adjacent to independently owned operations including a Tesco Extra store, a Tesco petrol filling station, JYSK, and Aldi.


Constructed in 2006, the development extends across approximately 10,482 square metres, or 112,835 square feet.

The scheme comprises a mix of modern retail warehouse units and a complementary neighbourhood centre, offering 13 individual units in total with Part Open and Part Bulky Use planning permission.

The units range in size from 94.6 square metres up to 1,994.9 square metres. Visitors have access to approximately 248 customer parking spaces across the commercial grounds.

The park is currently 100 per cent occupied by a strong line-up of established national and international brands.

Key retail tenants include Marks & Spencer, Boots, DID Electrical, Maxi Zoo, and Mountain Warehouse.

The neighbourhood centre element accommodates service and convenience operators such as Costa Coffee, Card Factory, and Salon B.

The first-floor accommodation is fully let to Peak Performance Academy, which provides additional rental diversification.

Additionally, the scheme benefits from an agreement with Tesla to operate eight electric vehicle charging bays within the customer car park.


Commercial figures show that the property generates a total current rental income of 1,326,458 euro per annum, with a weighted average unexpired lease term of 4.45 years to break options and 6.46 years to lease expiry.

Cushman & Wakefield noted that the quoted guide price of 15.4 million euro reflects a net initial yield of 7.83 per cent, assuming standard purchaser costs of 9.96 per cent.

The selling agents highlighted that the fully occupied asset offers investors an attractive income profile alongside scope for additional income generation through parking commercialisation.

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