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A few weeks ago, during the Christmas period, I treated myself to the ideal night in. I was sat on my comfy sofa, blanket on my legs, my girlfriend by my side, hot chocolate in one hand, and TV remote in the other. The lights from the Christmas tree were too bright to enjoy a proper televised experience, but that didn’t bother me. What did bother me was the exhausting job of selecting a movie to watch on Netflix, especially for a rom-com junkie like me who’s probably seen 99% of the platform’s genre.

Following a bruising year for investors in 2022, markets opened 2023 in much better spirits. Nearly all the major asset classes enjoyed strong returns, with global equities up over 7% in dollar terms in January, global bonds by close to 3%, corporate and emerging market bonds outperforming governments, and gold up almost 6%. Commodities were generally more subdued, with the oil price declining by 2%, taking it 7% lower than a year earlier, a dramatic turnaround from its steep rise in the early months of 2022.

Artificial Intelligence, otherwise known as AI, is becoming ever more prominent in our day-to-day lives, both personally and at work. The market size of AI is gaining momentum. According to Precedence Research, the global AI market size was estimated at USD 119.78bn in 2022 and it is expected to be USD 1,597.1bn by 2030, with a forecast Compound Annual Growth Rate (CAGR) of 38.1% from 2022 to 20301. So, what’s driving this growth?

As we turn the page on 2022 and look with cautious optimism at 2023 for some respite in markets, investors are appraising the investment landscape with an understandable degree of trepidation. Whilst a mild recession seems the widely expected outcome this year, we are starting the year from a more attractive base to generate long-term returns.

I have recently returned from a holiday to Cape Verde, where the country’s motto of “No Stress” suits the tropical island lifestyle. After returning to (a much colder) reality it has dawned on me that investors ought to take a leaf out of the Cape Verdean’s book and try not to stress and act in haste when making investment decisions.

Having booked my first skiing holiday in 11 years with some friends in Chamonix towards the end of January, I’m seeing news articles showing temperatures approaching 10c and zero snow on the ground. When I booked the trip for my group, of all the things I considered that might scupper the trip; no snow in the Alps, in January, was not one of them. Investing is far from immune to such tales of the unexpected.

The month of January takes its name from the Roman god Janus, whose two opposing faces depict duality and transition, endings, and new beginnings. This god of gateways looks both backward and forward, and if ever there was a January to excite him (he is generally depicted with a beard), then this is surely it.

2022 has been an eventful year across financial markets, and while anything could happen during the last few weeks of December, I thought it would be worth reflecting on the extraordinary market behaviour we have seen over the past few years.

It feels as though there are numerous examples from the final throws of this cycle that could be placed under the microscope of the financial historian, decades from now. Could it be Austria’s 100-year bond that yielded 0.375% in December 2020, down over 60% since? Or perhaps US CCC rated corporate debt yielding 7.5% in the summer of 2021, a credit rating that has a long-term average annual default rate of 25%?

So far, the year 2022 has been one that investors in UK mid-capitalisations (mid-caps) would probably prefer to forget. The first six months of this year witnessed the worst relative performance of UK mid-caps vs UK large capitalisations (caps) on a rolling six-month basis since 1986 (as far back as I could find data). By 30th June, they had underperformed UK large caps by a staggering 18%. The performance gap has since widened a little to over 19% on a year-to-date basis. The absolute performance of UK mid-caps is not as stomach churning, but at -15% it is still poor.