Monthly Note

Happy New Year!  Let’s hope 2023 turns out to be a better investment year than 2022, I doubt it could be worse.  The S&P 500 ended down about 20% for the year.  Tech ended down almost 35%, but value was only down about 5%.  Bonds were all over the place and tough to generalize, but investment grade bonds were down about 12%.  Outside of energy stocks, very little did well last year.  We’ll be reaching out for a lot of appointments in the coming months, but if you want to go over your accounts, don’t hesitate to reach out and schedule a time to talk.

We’re still in the bizarre limbo land of waiting to see when the fed will start easing interest rates.  Unemployment, consumer spending, and wage growth are still “good”, which is oddly a “bad” sign for easing interest rates, so markets continue to be volatile.  The looming recession doesn’t seem to be materializing by most measurements, yet everyone seems convinced it will come anyway.  This seems more like a financial reset than a recession.  Companies are taking the opportunity to lock in price increases that haven’t happened in a long time (inflation), and similarly looking to reign in their own spending during a time of uncertainty.  I believe unlike the 2008 recession, companies will come out of this relatively strong, the mystery will be how consumers fair.  How will inflation fair against the increased earning power most workers have seen over the past few years?  From a financial analysis standpoint, it is a fascinating time to observe.  From the inside looking out, including all of us, it’s scary and very unnerving.  That’s perfectly normal.

We’re going into our 13^th month of a bear market, which typically averages about 10 months.  I wish I could promise that a rebound is right around the corner, but it looks like we may be retesting lows; December was a tough month, down about 5%, after the October and November rebounds.  I still think we are in a situation where the upside outweighs the downside.  The rebound isn’t here yet, but that doesn’t mean it isn’t coming.  Hang in there

Opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. Because of their narrow focus, investments concentrated in certain sectors or industries will be subject to greater volatility and specific risks compared with investing more broadly across many sectors, industries and companies.