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2023 Market Highlights Thumbnail

2023 Market Highlights

2023 is officially in the books. Let’s look back at a great year in the market. 

  • In case you were sleeping, the S&P500 (the market) had a terrific year being up 24%.
  • I’m not going to rehash the big things but will point out some things I think are worth sharing.
  • We never saw the recession everyone said was guaranteed to happen. Inflation was cut in half. The Silicon Valley Bank implosion was contained. Finally, the market is near an all-time high.
  • Within the S&P500, the top 10 performers provided 86% of this index’s return.
  • While the S&P500 was up tremendously this year, not all stocks within the index did well. Roughly 1/3 of them were negative for the year. This is one of the reasons I recommend direct indexing (done properly) for some of my physician clients. You can sell those losers, grab the losses to reduce your taxes, and still participate in the market gains.
  • You know how I love relying on the experts about the market (note sarcasm font). Barron’s surveyed six of these experts for their predictions on where the S&P will end 2024. The average was 4838. The S&P ended 2023 at 4770. If these experts are right, the market will gain 1% this year.
  • As a point of reference, most of these experts predicted the S&P would end 2023 in the low 4000 range. About 15% below where it did finish the year.
  • Actively managed equity mutual funds once again lagged their indexes. Shocker!
  • Large Cap Growth had the best year for the major US classes with growth of 42.7%.
  • Large Value brings up the rear at 11.5% growth.
  • Looking at 10-year averages, Large Growth continues to lead with annual growth of nearly 15% and Small Cap Value finished last with a 6.8% yearly average.
  • Expect to hear comments this year about potentially significant growth within the Small Cap space.
  • We ended the year on a positive note. Do you even recall the market was down 10% at one point? Be honest.
  • I sure hope your advisor was doing some tax loss harvesting when the market was down and didn’t wait until the end of the year as that ship had sailed by then.
  • The death of the boring old 60/40 portfolio continues to be a talking point. However, it returned 18% in 2023.
  • Overall, Large Cap blend led the major asset classes with a return of 26.3% last year. Commodities returned to their normal place at the bottom with a 23 return of -7.9%.

 

My thoughts heading into 2024:

  • I won’t be sharing too much here as I only share those specific thoughts with clients (already sent out last week).
  • Although the Fed is not calling for cuts, expect the conversation to pick up this year.
  • Rates and inflation will continue to decline. This includes lending rates, like mortgages, credit cards, and car loans.
  • Ignore the noise from the experts. If you are wondering why, refer to the notes from above on their predictions for 2023.
  • If you are feeling like the market is always down, know that since 1957 it has ended the year positive nearly 80% of the time.
  • Finally, we will end the year on December 31st😉

 

As we enter the new year, “May the best of your today’s be the worst of your tomorrow’s.” Jay Z

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