Asset Strategies International: On the Move Webinar
With 2022 nearly over, investors are looking towards opportunities for the markets in 2023. With interest rates still rising, the outlook may not be ideal for those expecting the market to immediately rebound.
That’s also being compounded by the level of debt in the financial system today. Rising rates are causing an explosion in debt financing costs. That’s true across the spectrum, from individual investors to corporations to governments.
For heavily leveraged companies, rising rates could mean corporate bankruptcies could rise. If that occurs, companies and individuals who invested in a company’s debt can make out fairly well. But those who own the equity in the company could see some major – if not total – losses.
It may be prudent for investors to look for companies with reasonable debt loads. Or to invest with financial players that are taking debt positions rather than equity investments right now.
Those looking for a safe-haven could find it in some natural resource companies. Natural gas has been a strong winner, and the winter heating season is already well underway.
Natural gas exports from the US to energy-strapped Europe may not move as quickly as many expect. But that could prove a source of potential growth for the space for years to come.