The year 2022 was easy on our emotions when it came to the philosophical questions of life and death, as the threat of Covid somewhat got muted. But it unleashed another kind of fury.
Volatility gripped the equity markets, as global recession seemed imminent. Inflation surged to unprecedented levels, forcing the central bank to pile up steep interest rate hikes one after another, post two years of policy easing. That dampened the slightly renewed interest in the real estate market, as borrowers felt squeezed. Optimism in new assets, such as crypto, subsided as it entered a prolonged winter. Several states clamouring to get back on the old pension bandwagon threatened to put a spoke in the new pension policy wheel. And there weren’t even new income tax incentives to lessen the sting.
As we stand on the precipice to enter 2023, things don’t seem much brighter either. The market is nowhere near stable, and the rising interest rate regime is expected to continue for a while. With tech majors announcing major job cuts of late, all doesn’t seem well, with indications of more trouble in the coming year.
But all was not as bad in 2022 and is unlikely to be in 2023 either. The digitalisation push that the financial industry got post-Covid took larger strides in 2022, and several customer-friendly regulations came in. That’s not to say that gaps don’t remain.
Outlook Money roped in leading experts from the equity, banking, insurance and tax domains to assess how we fared in 2022 and what lies ahead in the future. We have also included the highlights of each sector in 2022 and the expectations in 2023.
For lay investors, it’s time to tighten the seatbelts and weather the turbulence, with an ample dose of patience. Diversification in the portfolio and staying the course with an eye on individual financial goals is what will get you through. According to JP Morgan Asset Management’s projections for 2023, Long-Term Capital Market Assumptions, “The turmoil of 2022 has brought asset return forecasts close to long-term equilibrium; the 60:40 can once again form the bedrock for portfolios, with alternatives offering alpha, inflation protection and diversification. Once today’s market turbulence clears, investors will have more scope to achieve their long-term portfolio return objectives.”
While you are taking stock of your portfolios, you may well take tax planning into account, especially as your employer’s nudge for tax declarations might have already landed in your office mailbox. To aid you in that, we have come up with a guide to help you broadly compute your tax liability.
If 2022 was volatile, the couple of years before that were tougher, both emotionally and financially. Some individuals inadvertently found themselves in debt traps because of job losses and pay cuts; debt management plans extended a helping hand to some and put their lives back in order. With many companies taking to layoffs again, finding more about these plans can come in handy.
If you are looking to wade through all the uncertainty and clear your head after two long winters of staying indoors, a trek to the hills this time may be just what you are looking for. We spoke to regular trekkers to find out the costs involved. Enjoy a well-planned winter trek to enter the new year rejuvenated.
nidhi@outlookindia.com