Market Up in 2023, but Choppy Waters Ahead

On this episode of A Wiser Retirement™ Podcast, Casey Smith and Andrew Pratt, CFA, talk about market performance in 2023 and discuss the potential for choppy waters ahead. They also delve into market expectations, the comparison between growth and value investments, bond performance, and provide insights into the market’s future direction. They will educate you on the significance of asset allocation and diversification within portfolios, offering actionable steps for effectively managing risk exposure.

Listen on Apple Podcasts or watch on YouTube:

SUMMARY:

2023 Market Performance

2023 was expected to be a year of doom and destruction in the market. All the predictions for this year were bleak. There was a lot of AI hype, which drove up market expectations and earnings growth projections. Strong GDP growth and a robust labor market played a significant role in the market’s great performance in 2023. Year to date, the S&P 500 is currently up a little over 17%, compared to being down 18% last year.

Growth vs Value

Another thing we look at is growth vs value. Value stocks tend to pay higher dividends, typically can’t grow their market share, and can be managed better. A growth stock is something like Apple or Pepsi. People thought value was going to make a comeback from 2022 into 2023, but that hasn’t happened at all. Growth has outperformed value by 24% YTD.

Bonds

For conservative investors in 2022, the bond market was hard. Interest rates rose faster than ever in history. Year to date, bonds have performed slightly positive. This isn’t stellar, but it’s better than being down. The main thing to remember about bonds is that they are mainly for diversification and protection of the portfolio.

Concerns About Where the Market is Headed

One of the concerns in the market right now is the inverted yield curve. This is when the short term yield is higher than the long term yield. It has almost been inverted for a year now. The short term interest rate is supposed to be lower than the long term interest rate, but right now it’s flipped.

Another concern has to do with the index that looks at leading economic data, which is the leading economic indicators. This is put out by the conference board and they look at 10 different leading variables. That leading index has declined 16 months in a row.

What actions should investors take now?

At the end of the day, it’s important to keep in mind that your focus should be on the long-term. Stay invested and don’t get caught up on trying to time the market. When we take clients through our financial planning process and look at probabilities of success, every one of those probabilities includes repeating the great financial crisis. By having a plan in place like this, our clients are prepared no matter how the market ends up performing.

Download our eBook: “Buyer Beware: Why do they keep trying to sell you that annuity?”

TIMESTAMPS:

0:00 Intro

02:05 Market Performance and Investment Trends

16:33 Investor Concerns in Slow Growth Market

LINKS:

Learn more about Casey Smith and Andrew Pratt, CFA.

CONNECT:

Twitter, Instagram, Facebook, LinkedIn, and YouTube.

Learn more about A Wiser Retirement™ podcast and access previous episodes.

learn-more-2024

Recent posts

  • 5 Psychological Biases in Financial Decision-Making
  • should i pay off my mortgage before retirement or invest

Share This Story, Choose Your Platform!

Wiser Wealth Management, Inc (“Wiser Wealth”) is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). As a registered investment adviser, Wiser Wealth and its employees are subject to various rules, filings, and requirements. You can visit the SEC’s website here to obtain further information on our firm or investment adviser’s registration.

Wiser Wealth’s website provides general information regarding our business along with access to additional investment related information, various financial calculators, and external / third party links. Material presented on this website is believed to be from reliable sources and is meant for informational purposes only. Wiser Wealth does not endorse or accept responsibility for the content of any third-party website and is not affiliated with any third-party website or social media page. Wiser Wealth does not expressly or implicitly adopt or endorse any of the expressions, opinions or content posted by third party websites or on social media pages. While Wiser Wealth uses reasonable efforts to obtain information from sources it believes to be reliable, we make no representation that the information or opinions contained in our publications are accurate, reliable, or complete.

To the extent that you utilize any financial calculators or links in our website, you acknowledge and understand that the information provided to you should not be construed as personal investment advice from Wiser Wealth or any of its investment professionals. Advice provided by Wiser Wealth is given only within the context of our contractual agreement with the client. Wiser Wealth does not offer legal, accounting or tax advice. Consult your own attorney, accountant, and other professionals for these services.

Sign up for our newsletter!

Our latest blogs, podcasts, and educational videos delivered to your inbox weekly.