Financial Planning Fridays #69: 2023 Year-End Review

I love looking through history for clues on what may happen next in the market. History gave us a lot of reasons to be optimistic about 2023 and we were right. This was a year of great returns. 

Let’s look back at a few of the historical examples that we discussed this past year. 

In our 2023 Market Outlook video we gave you three reasons to be optimistic this year.  All three proved to hold true this year.  

  • Markets usually bounce back after a significant down year 
  • The was the third year of the Presidential Election Cycle–typically the best for stocks
  • Stocks have done well in the 12 months following a peak in inflation

Next, we looked at the January Barometer. In the years where the S&P 500 was positive in the first month of the year, like this year, it has historically meant the market would finish positive 86% of the time. This once again held up this year.  

In the Spring of 2023, we looked at how pessimistic your neighbors were in this video and why you should be buying the investments they wanted to sell. That worked out exceptionally well this year. Despite record pessimism, the market moved higher and left a lot of your neighbors behind. 

Inflation quickly came down this year, so we analyzed that in June. The historical data showed that rapidly falling inflation is good for stocks- and boy was it ever this year. 

In October we looked at how well stocks have historically performed in the 4th Quarter.   This once again held true as the market roared higher starting on October 27th with a gain of more than 15% in 7 weeks. 

Harry Truman said, “There is nothing new in the world except the history you do not know.” We can’t tell the exact future of the markets, but we can look through history for clues and trends on what may happen next. 

We loved working with you in 2023 and are excited to bring you another year of Financial Planning Fridays videos in 2024!

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