Updated 2023 Market Prediction by CIO, James R. Wigen, CAM® ChFM® CPM® CWM®, Sr. Portfolio Manager & Sr. Wealth Manager
Happy New Year to Everyone!
Thankfully 2022 is over, and so far in 2023 the market is showing signs of strength.
Earnings are starting to be announced, therefore, we are starting to learn how earnings look for stocks and what the future growth potential is during 2023. The few companies who have reported so far have mediocre results, and those results are causing layoffs to be announced.
Wayfair announced layoffs Friday and their stock went up 20%+. We are not seeing that in most layoff announcements, however, stocks like companies getting leaner by reducing expenses going forward.
The economy is showing signs of a slow down, which is what the Federal Reserve wants, however, these signs are showing a soft economic landing may be possible.
I do expect the market to decline a little further throughout 2023, as the Fed Rate Hikes from June 2022 have had more time to kick in. As long as the Employment numbers remain stable, we should not see a market “Crash” as we experienced in 2000 & 2008.
In 2022 the economy was good, and stocks sold off any way, why is that, stocks price in events that come true in the near future, not at the time when economic data is released.
The good news, for 2023, we should see economic data showing signs of weakness, however, as much of that bad news has already been priced in or nearly priced in, we should see stocks going up as they start to price in a stock market recovery, despite a mediocre economy.
When looking at the Debt Ceiling issue, I do not expect that issue to be troubling to the market. We have seen this song and dance before, going back to Pres. Obama’s time when the U.S. Credit Rating was actually Downgraded. During that time, the stock market had days where it sold down, however, it did not cause major term oil.
I say all of this with the data which is available for analysis now, if the data takes a major turn lower, the market will go lower. Again, the market has priced in a lot of negative news already, and my belief is this will be a year for market gains, and economic mediocracy.
Right now Cash, the money sitting in your brokerage account Money Market Fund that is not invested, is paying an annual yield close to 3.75%, and that yield will rise when the Federal Funds Rate rises.
The Cash sitting in investment accounts, allows for slowly purchasing shares on market declines, while adding to Growth stocks & stocks paying 4%-14% dividend yields, and allowing us to get through these confusing times.
I am trying to Sell Covered Call Options to Generate More Income, however, the market is so volatile it has become very challenging to earn income without losing the under line stock.
Best strategy for 2023, try and max out all accounts where Pre-Tax contributions help Reduce Taxable Income.
I hope this information is helpful, however, I still encourage you to let me know if you have any questions or concerns.
James CPM® designation was earned through Global Academy of Finance and Management or GAFM®
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All opinions expressed by James R. Wigen on this website are solely his opinions and do not reflect the opinions of IFP Advisors, LLC, dba Independent Financial Partners, (IFP). Investment Advice offered through IFP Advisors, LLC, dba Independent Financial Partners (IFP), a Registered Investment Adviser. IFP and Independent Financial Management, LLC (IFM), are separate entities.