Opportunities on the Horizon: Investing Through a Slowing Economy

Overview | WEALTH OUTLOOK 2023 | MID-YEAR EDITION | 10 1.2 Recession, recovery: A journey unfinished 1 Adaptive Valuation Strategies (AVS) is the Citi Global Wealth Investments’ proprietary strategic asset allocationmethodology. It determines the suitable long–termmix of assets for each client’s investment portfolio. The AVS portfolio used in the analysis is the Global USD Traditional Only Risk Level 3 portfolio. Risk levels are an indication of clients’ appetite for risk. An AVS L3 - Seeks modest capital appreciation and, secondly, capital preservation. The level 3 diversification does not guarantee a profit or ensure against a loss of principal. STEVENWIETING Chief Investment Strategist and Chief Economist Themarket rebound in 2023 has reminded investors of the futility of market timing. While the worst looks to be behind us, the bear market journey is not yet complete. Investors can potentially benefit from income-generating assets while beginning to reengage portfolios in a number of building valuation opportunities and long-termgrowth generators. In 2022, we rotated to conservative, income generating assets in both equities and bonds. After playing defense, this opens the door to further investment opportunities ahead We have adjusted our economic forecasts slightly upward, but the effects of policy tightening in US labor markets is still to be felt Our present asset allocation strategy prioritizes quality income, focusing on companies with strong balance sheets and consistent dividends. In our AVS Risk Level 3 Portfolio, 1 we are overweight US government bonds. While we have been cautious on small-cap equities, future returns have improved as valuations collapsed. The same is true for many assets around the world where we have already begun to shift portfolios