As the narrative around inflation develops in 2023, Invesco discusses two scenarios that are deemed most likely and what asset classes they expect to outperform in each scenario in their 2023 Global Market Strategy report.

Their model asset allocation expects the economy to move from contraction to recovery (early cyclical) and inflation to peak.

Based on historical returns during each part of the cycle, they expect high-yield credit and REITs to be best performers on risk-adjusted basis, followed by equities and gold.

They've reduced commodity and cash exposure to zero and increased exposure to bonds and real estate.

Not taking any rushed decisions based on market outlooks but it is an informative read nonetheless.