From the return of IPOs to stocks that can survive a recession, here’s what to expect in 2023

Many experts are pointing to a possible recession in 2023. Wondering how to invest your money in the new year? Here are some suggestions.

“Where to invest $25,000 in 2023” is included in Fortune’s Quarterly Investment Guide, released this morning. In the piece, you’ll find advice from three top experts who offered very different perspectives on how they’d deploy money right now.

“There is an expression, cash is king,” Heather Loomis Tighe, venture capital adviser and partner and strategic adviser to Family Offices, formerly of BlackRock and JPMorgan, told Fortune. “I would hold 35% in a municipal money market and short-dated municipal bonds paying 2 to 3.5% exempt from federal taxes.”

In the piece, Nicole Gull McElroy writes: “Tighe says to take 4% of the position every month for six months and drop it into diversified equity markets, leaving 11% in cash and municipal bonds, averaging into the equity markets after six months. Next, she recommends I Bonds, or federally guaranteed bond investments with an interest rate that resets with inflation. Right now, iBonds are paying roughly 9%, which is just about what you can expect to get paid on a long-term investment in stocks.”

Meanwhile, David Levi, managing partner at Brookfield Oaktree Wealth Solutions, a firm that manages $800 billion in alternative investments, recommends investing in real estate, infrastructure, and renewable power in both private markets. Levi also points to the stock and bond market as offering investors a sound alternative investment strategy. “Today given the macroeconomic environment, I’d argue the 60/40 portfolio isn’t sufficient,” he told Fortune. “Adding alternatives is more important than ever.” For more advice, you can read the complete report here.

For the Quarterly Investment Guide, Fortune also asked three top portfolio managers for their best stock picks for 2023. In the report, “The 8 best stocks to buy for 2023,” you won’t find as many tech companies in the selections, since the experts are seeking stable growth and margins in the coming year.

“If a recession is in the cards for 2023, money managers believe businesses with steady revenue streams that provide crucial or sticky services should perform well for investors,” Fortune’s Anne Sraders writes. For example, here’s a favorite of Lori Keith, director of research and portfolio manager at Parnassus Investments: Republic Services (RSG, $130) is the second-largest waste management company in the U.S. “She argues that in rough times it ‘provides that degree of defensiveness given its position in the market,’ adding that the company has a ‘very significant amount of recurring, annuity-type revenue,'” Sraders writes.

Also in the guide is the report, “10 IPOs to bet on in 2023—if the pipeline opens up,” where you’ll find insight into the future of IPOs. “We have a robust pipeline of companies at the NYSE that are looking to go public. It’s really a matter of the timing falling into place,” Michael Harris, global head of capital markets at the New York Stock Exchange, told Fortune.

You can find the complete Quarterly Investment Guide here.

Correction: In yesterday’s newsletter, a typo was included that read “aspirations are the big business opportunities Meta wants to address.” The company should be Block, not Meta. I regret the error.

See you tomorrow.

Sheryl Estrada
sheryl.estrada@fortune.com

Big deal

"Technology and Innovation in the Hybrid Age," a new report by JLL (NYSE: JLL), a professional services and investment management firm, gauges how companies use tech to support a hybrid work model. Remote working technology (47%), in-office collaboration technology (40%), and workplace experience apps (36%) are the top technologies most companies have in place to support hybrid work. However, over the next three years, the emphasis will shift toward "technology investments that support wider business goals such as sustainability targets, as well as overall digital transformation and intelligent operations," according to the report. Another finding is by 2025, 78% of companies surveyed plan to incorporate over 10 of 15 technologies identified as anchors for hybrid work transformation. This report is based on the results of JLL's Future of Work global survey of over 1,000 decision-makers.

Courtesy of JLL

Going deeper

"The 2022 AWS Global Digital Skills Study: The Economic Benefits of a Tech-Savvy Workforce," released by Gallup and Amazon Web Services, finds that digital skills drive gains for individuals, organizations, and economies. Advanced digital skills alone, including cloud architecture and software development, raise the annual global gross domestic product by an estimated $6.3 trillion by increasing the income and productivity of workers, according to the study.

Leaderboard

Nathan Gooden was named CFO and treasurer at Squarespace, Inc. (NYSE: SQSP), the all-in-one website building and e-commerce platform, effective Oct. 18. Gooden has more than two decades of financial leadership in the technology sector, including most recently as CFO of Amazon Alexa WorldWide. In addition, Gooden spent 20 years serving as CFO for multiple companies in the payments, social commerce, and consumer electronics space. He began his career at PricewaterhouseCoopers, where he spent five years as a lead auditor, and at Ernst & Young in the tax division.

Steve Yendall was named CFO at SiriusPoint Ltd. (NYSE: SPNT), a global specialty insurer and reinsurer, effective Oct. 31. Yendall replaces current SiriusPoint CFO David Junius, who has resigned to pursue other opportunities. Yendall brings 25 years of experience to SiriusPoint. He was most recently managing director at Guy Carpenter, Canada and North America. Before that, Yendall was CFO and COO at RSA Canada Group. He has held numerous financial, operational, and insurance advisory roles over his career at companies including RSA Canada Group, Ernst & Young, and Accenture.

Overheard

"Despite widespread financial turbulence, muni observers are witnessing a market that’s as attractive as it’s been for decades. Rates are up and high-quality credit is readily available. At the same time, municipal bonds are relatively inexpensive on the basis of both fundamentals and historical norms."

—Paul Malloy, head of municipal investment and credit research at Vanguard, writes in a Fortune opinion piece.