Broker Check

A Review of 2023 So Far

| October 02, 2023

With three quarters of 2023 behind us, let’s review what has happened so far this year. Our economy continues to slow down from the uncontrollable speed it was growing at following the COVID-19 pandemic. Inflation has significantly fallen from 9 percent to below 4 percent as of August 2023. Unemployment is close to multi-decade lows and Corporate America continues to resolutely report profits. These are good long-term signs and also mean that the price of eggs is not seemingly doubling overnight!

The S&P 500 Index has gained around 12 percent so far in 2023 but a small group of 7 large technology companies have accounted for the vast majority of this positive performance. The remaining 493 companies are close to breakeven. The less technology-oriented Dow Jones Index has only gained around 1 percent this year.

Almost every stock market investor owns some of these 7 technology companies driving the market. However, history shows us that putting all of our eggs in one aggressive basket and trying to constantly time the market winners is a losing strategy. Instead, remaining diversified and sticking to a long-term plan are two of the keys for prudent investing. This involves owning many industries and potentially owning more conservative investments like bonds along with CDs. A diversified portfolio substantially reduces risk while providing steadier long-term returns. While only owning these seven technology companies would have substantially boosted an investor’s return this year, it would have resulted in a 46 percent loss in 2022!

As we begin the fourth quarter, the market is in the middle of its seasonally weak period. We could see road bumps in the next month or so. However, by the end of the year, we anticipate the market maintaining the majority of its gains. We believe your investments continue to be well diversified and align with your risk tolerance that we’ve discussed together. We are always available if you have any questions about your portfolio or want to review anything in your financial picture. Thank you for your business and confidence.