Welcome to 2023!

Happy New Year to all of our readers.  We wish you a happy, healthy, safe and prosperous 2023!!

From an investment standpoint, we’re happy its now 2023.

Inflation, the Fed, the War were the major concerns in 2022…  I expect more of the same for the time being.  We need to see significantly softer inflation numbers which enables the Federal Reserve to back off from raising rates.  The sooner this happens, the better. 

To wrap up the numbers for 2022, the Dow Jones was the market index leader, losing (7.0%), the S&P 500 (18.15%), the Nasdaq (33.10%) and the Russell 2000 finished down (20.44%).

The best overall category according to Morningstar was Large Value, losing (7.54%).  The poorest performing category was Large Growth, down (29.14%). 

Value outperformed Growth by a wide margin for Large, Mid-sized and small cap stocks.

Over the pond, foreign stocks were down (14.01%) and Emerging Markets down (19.74%). 

Bonds, according to the Bloomberg Bond Aggregate Index was down (13.01%).

2023 Important Reports

The first important number of 2023 will be Friday, when we hear the December jobs report.  The employment picture is front & center on the Fed’s mind.  We are still creating jobs, as there are more jobs than workers to fill them.  This has pressured wages that employers need to pay in order to hire an adequate number of workers.  This is the one area the Fed has not been successful in slowing.  The Fed certainly slowed the housing market, pressured both the stock and bond markets.  Corporate projected profits are constantly being lowered for 2023.

The second important number of 2023 will be on January 12, when we hear the December Consumer Price Index (CPI) report.

Investors and the markets will then have time to digest those numbers in anticipation of the Fed’s next rate announcement on February 1st.

Most firms now believe, we’ll in fact have a recession in the later part of 2023.  The outlying firm is Goldman Sachs.  They currently believe we’ll avoid a recession because of consumer resiliency to be able to continue spending.  Avoiding a recession and conquering inflation at the same time is a tall mountain to climb.  Let’s hope Goldman is correct, however I wouldn’t bank on it.

I’m rather cautious thinking for 2023, as of now.  Having a value tilt for equities combined with a little dry powder seems to feel right for the time being.

Key Financial Data 2023

Our 2023 Key Financial Data (the final version) is now available on our website.  This document contains an abundance of valuable tax information, including tax brackets, deductions, credits, and Retirement Plan/IRA limits.  There is also information on Medicare premiums based on your 2021 income, Social Security updates, and many other useful limitations, exemptions, etc.

Inflation from 2022 has certainly impacted tax brackets, and much more for 2023!

You can find the 2023 Key Data under the Retirement Resources tab above.

Feel free to share the Key Financial Data with anyone you feel may be interested!

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