Congratulations! You made it. You just survived the worst S&P 500 since 2008. The S&P lost 19.4% before Dolly Parton and Miley Cyrus could sing the last tune of 2022. Actually, in my 41 years traversing this terrestrial rock, only 2002 and 2008 had worse calendar year returns than what we just went through. You watched the Fed Funds rate go from 0.1% to 4.4% (the biggest move since 1973), energy stocks claim 9 of the top 10 performing spots, and the baton get handed from ‘growth’ oriented stocks (down 29.8% for 2022) to ‘value’ oriented stocks (down 9.6%).
So, what’s next? As has been quipped many times ‘Uncertainty is the only certainty’. We still have conflict around the globe to resolve, an energy crisis, and a supply chain that is about as normal as my dad doing a crossword with a headlamp…
Even if those three were certain, that would still leave us with an unopened China and interest rates to deal with. That only touches the major topics this second. There could be plenty of others in the next 12 seconds or 12 months. Uncertainty is the only certainty, which is why planning > predicting.
One of my favorite things to do on New Years Eve is to look up past predictions gone wrong. JP Morgan’s dad telling him that electricity was a fad, the Michigan Savings Bank President telling Henry Ford that the horse is here to stay and Steve Ballmer from Microsoft saying in 2007 that there’s no chance the IPhone is going to get any significant market share always make me chuckle. I found a new one this year: ‘Before man reaches the moon your mail will be delivered within minutes from New York to Australia by guided missiles. We stand on the threshold of rocket mail.’ That wasn’t somebody’s weird uncle over the holidays. That was the U.S. Postmaster Arthur Summerfield in 1959. News alert. He got it wrong.
Humans love certainty. What can you be certain of for 2023? You could be certain of how much money you’re contributing to your retirement accounts. You could be certain that you have the proper life and disability insurance in place. You could be certain that your emergency fund could hold you over during a job change. You could be certain your legal documents are in order. You could be certain you’re headed in the right direction by taking the time to do a financial plan. We’re here to help!