2023 So Far So Good…

Superstition is not a strategy, although elite, professional athletes subscribe to superstitions all the time*. The reason for bringing up the topic is that talking about the stock market’s positive performance year-to-date in 2023 could warrant dialing back the optimism – for superstitious reasons! Hence, the “…” in the title “So Far So Good…”.

This said, the US stock market just finished a strong 2-month set of returns, in addition to an excellent January and stable returns in between. This positive performance has no guarantee of continuing but is evidence that staying in the stock market for the long-term – with a plan – can have positive long-term consequences.

  • The S&P 500 is up 16.4% year-to-date.
  • The Nasdaq over the same period is up over 31%.
  • The Russell 2000 Index of small companies is up 9.2%.
  • The Dow Jones is up 6.1%.

Client portfolios exposed to liquid, transparent, low-cost stock investments reflect these positive returns year-to-date, depending on the type of account and risk profile. Plus, cash invested in US Treasuries and certain high quality money markets is currently returning over 5%. These returns are a long way to the positive from this time last year.

There are still a whole host of events that could stall these positive market returns including continuing inflation, perception of credit quality of US government debt, skyrocketing US budget deficits, political instability in the world and more. Amidst these risks stand the positives including US and world interest rate normalization (read: higher, more “normal” interest rates as set by world central banks), a mostly steady US job market and still strong housing prices in numerous desirable and growing areas of the country.

It remains to be seen how 2023 will finish performance-wise. Use the above information to evaluate your savings strategy and your liquidity. Have an adviser who favors liquidity, transparency, cost effectiveness and risk awareness. A balance of these factors, plus an eye on tax efficiency, can go a long way toward reducing uncertainty in both up and down markets.

*Try googling “superstition and professional athletes” and see the results.


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