Simplifying supply chains, environmental responsibility, the growing role of risk calculation – these are among some of the key trends in investing that will play a key role in 2023. Especially since risk calculation will prove even more difficult in many industries, and changes in the law and regulatory pressure – means a question mark over how the market will cope, predicts Radoslaw Jodko, RRJ Group investment expert.
According to him, especially these five trends in investing and the economy will gain importance in 2023.
1. sustainability increases the importance of investment
Sustainability is no longer just the pressure of EU regulations, but also the huge expectations of consumers, customers and investors, for whom quality has inevitably begun to combine with environmental responsibility. In 2022, we have seen many large companies base their marketing almost exclusively on messages related to environmental goals. This is how companies not only build their image among customers or investors, but also among employees. Today, concrete actions around sustainability bring tangible benefits in terms of employer branding and building competitive advantages.
This civilization change will only intensify in 2023. Investors will evaluate given investments from this angle as well – and it will become part of the process of any investment analysis. It is to be expected that in addition to reducing CO2 emissions, we will pay closer attention to RES and reducing energy consumption – on the one hand, and on the other hand, we will look more closely at those data in ESG reports that are related to social diversity and attention to, for example, parity on boards of directors. EU regulations enforcing parity on boards will certainly be the topic of the year.
It is also apparent that environmental and social responsibility will not just be reserved for specific industries – but is significantly extending its effect to those that enter the entire supply chain sequence.
2.Supply chains – will determine business agility
2022 showed how sensitive supply chains have become in the economy, and their disrupted rhythm has caused a lot of turmoil in every industry. In 2023, expect the trend of simplifying supply chains to intensify, as many corporations have already seen that this alone translates into achieving greater business agility, which is becoming synonymous with greater security or liquidity protection.
Investors will also begin to ask how sustainable not only a company is, but how sustainable its supply chains are. In many industries – especially those where margins are not high – this means a major remodeling of the market.
3. real estate market under pressure
In the real estate market, there is bound to be such pressure on sustainable supply chains, as there is already talk of the need for more precise data in non-financial reports.
Considering investments, the real estate market has proven to be quite stable in the face of the economic tsunami that was triggered by the pandemic and then the war in Ukraine. The prevailing view is that it’s a good investment of capital, of course, given that it’s also a lock on capital for years to come.
However, there are a lot of changes lined up for 2023 – from changes in construction law, which changes a lot for those building their own homes, to, for example, changes related to EU regulations and pressure to achieve climate neutrality.
Premium locations – such as a plot of land in the Masuria region with access to a lake – will still count for investors. But for an investment to be successful, the following factors play a significant role: how quickly construction can begin, whether developers will meet deadlines, how subcontractors will behave, how to estimate investment costs with rampant inflation and volatile raw material prices.
4. risk forecasting even more difficult
Market volatility means that it is becoming increasingly difficult to forecast possible returns, and this in turn means that it will start to become even more important to forecast possible risks and try to hedge against them.
Investors’ prudence, restraint of emotions and cool calculation are qualities that have always come at a premium. Today there is an even greater awareness and a much greater openness to possible risks – including the realization that “guaranteed profit” is merely a marketing ploy, not a real investment feature.
5. without economic education and specialized experts, it is difficult to make wise investments
Specialization and the role of experts in investing is gaining importance, and it means looking for such specialists who are not only engaged in telling people about investing their own money on webinars they organize.
Professionalization related to comprehensive service – from analysis, to advice or appropriate legal protection in contract provisions – is gaining importance. Interest in economic topics has been growing for years, but I expect that in 2023 we will pay more attention to experience and expert approach to investing. Also because there is a growing public awareness or even a need to “do something with savings.”
Source: Radoslaw Jodko, RRJ Group
