A Waiting Game
As the end of 2022 is only two short weeks away, I want to remind everyone (on top of what your account statements have already told you) that a lot of market damage has been done this year. So, what does this mean for the path forward in 2023? Well, bluntly, we have two scenarios that are likely to play out. First, we get a recession that will probably hit around springtime and last a few months, or we get no recession at all.
If we are found in the former, then odds are the stock and bond market will see more downside, and as they mention in a recent piece from Barron’s, this is the more likely scenario. This, however, should be the opportunity that many investors are looking for. As I mentioned in the previous post, it currently is a great time to use any extra cash that you have and earn a hefty return in short term bonds. I now suggest that if we see further stock declines in the first half of next year, investors should take that money and put it to work in the equity market.
It is not just my opinion, but that of many Wall Street strategists, that in 2023 stocks will probably have an average year overall and could be in a very nice position for 2024. If you are willing to wait 12-18 months, then the first half of 2023 could provide some fantastic entry points.
Please reach out to myself or other members of our team with any questions about how we are positioning client portfolios for this time period.
Barron’s Article: https://www.barrons.com/articles/stock-market-economy-inflation-performance-outlook-51671218519?mod=hp_MAG
Disclosure: Michael Lafata is a Financial Advisor offering securities and advisory services through Cetera Advisor Networks LLC, member FINRA/SIPC, a broker/dealer, and a Registered Investment Adviser. Archstone Financial is not a subsidiary of nor controlled by Cetera. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. The views stated on this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be considered directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. Branch Address: 324 Grove Street, Worcester, MA 01605