CIO Insights Resilience versus recession However, given the country’s continued strong economic momentum, it is difficult to see the Indian stock market as fundamentally overpriced. Japan should benefit from its delayed and still-ongoing Covid-19 recovery as well as accommodative fiscal and monetary policy. Similar in some ways to Germany, the country’s cyclical structure is highly dependent on China, which could provide a tailwind in 2023 and make Japanese equities a useful tool for diversification. Stocks remain an essential component of a diversified portfolio. Decent overall price gains are expected in 2023, but with periods of perhaps substantial volatility. Stocks: real assets at a reasonable price Market and portfolio implications: o High valuation discounts have made stocks seem comparatively inexpensive again o But short-term risks remain and volatility could be high o Investors could focus on European stock markets in coming months In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Performance refers to a nominal value based on price gains/losses and does not take into account inflation. Inflation will have a negative impact on the purchasing power of this nominal monetary value. Depending on the current level of inflation, this may lead to a real loss in value, even if the nominal performance of the investment is positive. Investments come with risk. The value of an investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk. This document was produced in December 2022. 16