Market Recap
As we head into the final week of 2023, let’s take a moment to reflect on how crazy markets have been during the last few years.
While markets always throw up surprises and sprinkle humility to the overconfident, the time since the beginning of the coronavirus pandemic has been especially noteworthy.
The world shut down in the first quarter of 2020. For a few weeks, most stocks went straight down.
Then, stimulus came in—A LOT of stimulus. This helped take stocks back up as the world grew confident governments would help the business world eventually get back to normal.
And then stocks kept going up, as did the amount of stimulus being thrown into the economy, and speculation set in. We had meme stocks, hard asset bubbles, record-low interest rates and let’s not forget insane prices for Pokémon cards and a mad rush for NFT’s (nonfungible tokens)- bet a lot of folks regret those decisions.
And then we had some inflation. The Fed raised rates and talked expectations down with the hope of getting inflation under control. Risk aversion, which had been mostly absent from the markets for more than a year and a half, returned and caused both stocks and bonds to suffer massive losses in 2022.
Then, we had less inflation in 2023 and even less as the year moved along. Hopes of a return to more stable prices and lower interest rates have once again caused risk on spirits to return. Market indices are back near highs, and many of the same companies that led the market up from 2020-2021 and then led the market down in 2022 are the biggest winners of 2023.
If you believe all of that was predictable, well, then, I have a quarter acre on Venus you may be interested in.
Whatever 2024 holds, it’s not unreasonable to think the current set-up of high valuations, government involvement in the markets, and geopolitical tensions will lead to some surprises.
And we think it’s probably a good idea to make sure that your portfolio is prepared for a future full of surprises—both good and bad. As we wrote in March of 2021: “The best time to think about how you’re prepared for that future is now. It may not happen, but if you wait until it’s obvious, it’ll be too late.
We are grateful for the opportunity to be your private wealth management firm of choice and hope you have a joyous holiday season. Wishing you great success in the year to come and Happy New Year, we’re here for anything you need.
Our Best Always,
Bob
Robert O'Braitis
CEO
Chief Investment Strategist
