As we step into the festive warmth of December, reflecting on the year feels akin to looking back over a challenging but rewarding marathon…. or maybe more like a roller coaster ride, depending on how closely you’ve been watching! It’s been a year of endurance, pace changes, and unexpected sprints, much like the journey we’ve shared in the financial landscape of 2023.
While the year began with a fairly decent rally, much of that positive performance that we experienced was wiped out in August through October as the stock and bond markets experienced a significant drawdown. But just like the resilience we’ve all honed over these past years, the markets showed their strength, bouncing back impressively in November. This rally, in many ways, was a pleasant surprise, mirroring the resilience and adaptability we all have within us.
Interest rates have been a bit of a seesaw, too, and they’ve largely influenced how the investment world has moved. There’s been a lot of talk about whether we’re headed for a smooth economic path (a “soft landing”) or something a bit bumpier (a recession, perhaps). The truth is, the future is as uncertain as ever, but as we’ve learned, it’s not about predicting the future—it’s about being prepared for whatever may come our way.
In the world of investing, it’s been intriguing to see the shifts and turns. For instance, growth stocks have been outperforming value stocks by a significant margin- a trend that hasn’t been this pronounced since the late 90s. And on the earnings front, while 2023 has been somewhat flat, there’s an air of optimism for 2024, especially in the technology and communications sectors.
As we peer into the rearview mirror at 2023 and look ahead through the windshield to 2024, one thing remains clear: patience and perspective are our most valuable assets. Like the wise words of Charlie Munger, “The big money isn’t in the buying or selling, but in the waiting.”
What’s on the market’s wish list for 2024? Raymond James CIO Larry Adam provides a festive perspective in his “12 wishes for the new year.”
Here’s to a holiday season filled with warmth, joy, and cherished moments with loved ones. And as we toast to the new year, let’s carry with us the lessons of patience, the wisdom to embrace the unknown, and the courage to continue our journey with confidence and hope.
Todd M. Wike, CFP®
CERTIFIED FINANCIAL PLANNER™
Managing Partner, Potomac Financial Group