Third Quarter 2023 Market Outlook - Adviser Investments
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Third Quarter 2023 Market Outlook

Chief Investment Officer Tim Clift shares his expert perspective on the markets and trends that matter to you. For more on our investment outlook and the latest financial planning advice, we encourage you watch our Third Quarter 2023 Webinar: Building Wealth Through Economic Turning Points or read this quarter's Adviser Outlook.  If you have questions for Tim or the Adviser team, please send them to info@adviserinvestments.com.

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It may be hard to believe—with interest rate hikes, lingering inflation and the chance of a recession—but despite it all, the S&P 500 is up about 20% since this time last year.
But it’s been a very narrow bull market—thanks in large part to a handful of big tech stocks that are up a blistering 86% year-to-date combined.
Does this mean the broader market will spread its wings and take to the sky in the second half of 2023? Well, we’re seeing some early signs that that may be the case—as small- and mid-cap stocks have begun to join the rally.
We’re watching a number of factors over the next 3 – 6 months—including Fed policy, market moves related to artificial intelligence (AI), opportunities in both the bond market and private investment markets. And one key point that cuts across everything else? Is cash still king in terms of yield? Or are your investments more efficiently deployed elsewhere as part of your diversified portfolio and long-term financial plan.
Let’s dig in!
Fed Chairman Powell has suggested that additional interest rate hikes are still possible if inflation remains above the central bank’s target of 2% – 2.5%. Given the nuances of the current economic picture, we see multiple areas of opportunity for the remainder of this year.
The first area of opportunity is fixed-income.
The same factors that made cash yields appealing have been at play in the bond market. When the Fed finally switches from raising rates to lowering them—and yields begin to fall—bond prices will rise. If that happens, bonds may experience a returns tailwind.
And speaking of tailwinds—we think we’re still in the early stages of AI-fueled growth across several industries. Health care, education, financial services, retail and manufacturing all stand to benefit from the adoption of AI.
We’re maintaining exposure to these areas of the market to create growth potential and diversification as we see where the momentum pendulum swings over the next few months.
Finally, we’re looking beyond the public markets to a new offering from Adviser and Polaris—private markets.
Capital shortages driven by the credit crisis this spring have made private markets a more compelling complement to traditional investments for accredited investors. And with over 10,000 private-equity-owned companies in the U.S. compared to less than 6,000 that are publicly traded—the opportunity set in the private market is significantly larger.
Are you interested in learning more? If you are an Adviser Investments client, talk with your wealth advisor to find out more about any of the themes I’ve mentioned here. You may also want to ask about our new partnership with Ropes Wealth Advisors!
If you are not a client, visit our website to book a meeting with one of our expert financial advisors to discuss your wealth strategy!
I’m Tim Clift, Chief Investment Officer at Adviser. On behalf of all of us here, we hope you have a wonderful summer and we look forward to speaking with you soon.

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Additional Third Quarter 2023 Resources

Market Outlook

Adviser Outlook, Third Quarter 2023

July 26, 2023
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