Summary of 2023

AI and the new megacycle for tech: Given the vast potential of AI, it's no surprise that the market has been looking for early winners and early losers. Many tech stocks have soared since ChatGPT captured the public imagination earlier this year.

We believe that this is the start of the next megacycle for the technology sector. But this evolution will not be linear, and investors will need to be nimble. Share prices are likely to experience ups and downs, with shares sometimes over-inflating and retreating when the market doubts progress. Questions also remain about the impact of AI on society and how best to regulate its development.

Companies such as Microsoft, Google and Apple have a large user base to sell AI products and services to. While we expect some AI start-ups to become wildly successful over time, the starting point for incumbents is solid.

In my humble opinion, MONITORING all things AI is a good strategy. Think of the Magnificients seven (7 biggest companies in the US that have invested in AI).

Stock markets in general 2023:

I focused on the Canadian stock market and the US stock market:

At the beginning of 2023 everything was nebulous, in fact nobody believed in the success of the stock market. Then disaster struck at the end of February: a banking crisis in the USA and Europe. First Republic Bank collapsed, was taken over by JPMorgan, and Silicon Valley Bank and Signature Bank collapsed in March. In the space of 11 days - from 8 to 19 March 2023 - four banks with total assets of around $900 billion were closed, placed in receivership or rescued.

This was followed by the failure of a fifth bank with around $230 billion in assets on 1 May 2023.

The Fed decides to inject funds to get out of the torpor. As the saying goes, $$$$ is available, so tecnos GRIMP. Subsequently IA and Magnificients Seven have a return of 50 to 60%. You have to understand that of the 500 biggest companies in the USA. The 7 have achieved a return of 50 to 60%. The other 493 have a return of 5%.

What saved the US markets THE TECHNO. The Canadian market was quiet compared with the previous year, with people preferring to sell shares with dividends to buy into the American market with LA TECHNO.

In conclusion, the good news is that inflation has come down, which is a relief, and this has caused the markets to take off. As for the recession, I don't think it's clear yet.

I'd like to take the time to thank you for being so present at each of my columns. Thank you for your encouragement and your comments. 2024 here we come!

Sources Mark Holden IA and Capital Group