We wish all our clients and readers a very Happy New Year. The FTSE 100 has seen heightened volatility as of late – falling 5% in September, before rising 3% in October and a further 7% in November. Those monthly moves up and down are substantially larger than typical monthly changes in the 1%-2% or lower range, and signal a developing battle between bulls and bears. Bulls want to believe that the rise in inflation is moderating, and that central banks will take their foot off the gas as pricing pressures ease. Bears believe past central bank actions as well as inflation’s dampening effect on consumer discretionary spending will push the economy into recession in 2023. Our view is that the stock market should continue to grind higher over the course of the year. However, it could be a bumpy ride and investors need to get used to such volatility.