Stock market investing: Global diversification is key in 2023

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A CIO overseeing $399 billion explains why it's imperative that investors make sure they're globally diversified in 2023 to avoid 'home country bias' — and where the banking crisis has created investing opportunities

Going forward, Smigiel also believes that value-oriented assets will be the next market leaders.Despite starting 2023 off strong, the stock market has struggled to maintain its rally this year in the face of a potential recession, a dire banking crisis, and fears of rising interest rates.

"We just don't see what would be the catalyst for having the FOMC not pause, but completely reverse course and start taking some of the hikes off the table," said Smigiel, who oversees approximately $399 billion in assets under management, in a recent interview with Insider."We can't really figure out what scenario the market is seeing that would price that in there."

. Still, he's optimistic that any upcoming economic slowdown in the second half of 2023 should be relatively shallow."As the market begins to price in the fact that we are not going to be reversing course in 2023, that could be a bit of a headwind for equities," Smigiel explained., Smigiel isn't focused on the direction of stock market movements. Instead, he's diverting his investing attention to the rotation of stock valuations.

 

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