Morning Market Brief: Thursday, April 20, 2023

Patiently search for opportunities

Financial markets experienced heavy volatility over the past year due to geopolitical tensions, tighter financial conditions and an uncertain global economic outlook. But according to CIBC Asset Management Chief Investment Officer Luc de la Durantaye, market volatility can offer unique investment opportunities?

• In a recent AdvisorToGo podcast de la Durantaye said although it has been a difficult environment for investors, they could reap the rewards of their patience and diversification.
• In the current market environment, holding cash benefited most portfolios. With sharply rising interest rates over the past year, cash holdings have rewarded investors with a relatively solid return, particularly given the volatility in equity and fixed income markets.
• Looking ahead, Luc sees an opportunity to redeploy cash into financial markets, potentially over the next couple of quarters. Credit markets might tighten in response to the U.S. banking sector troubles, which could lead the U.S. Federal Reserve Board closer to ending its interest rate hikes.
• Equities could be hindered by lower corporate earnings. Durantaye expects slower economic conditions will likely weigh on earnings and bring down equity prices. But the drop could provide an opportunity to invest in solid businesses over the long term.

Investing opportunities will favour those who are patient and willing to diversify. It is a great time to review your portfolio and set a plan to invest amid these potentially volatile conditions. For more information and to listen to the podcast, visit: Searching for opportunities in an uncertain market.

At?CIBC Private Wealth, we aim to take a comprehensive approach to managing, building and protecting your wealth. If you'd like to discuss this market and economic update in more detail, please get in touch with your advisor any time.