Your view on 2023 market outcome

[street]

We still are in a Bear market with ~20% down market from 2021 to 2022. Still a rollercoaster and sideways market from day to day and really nothing unusual about that.

We haven't officially been declared in a recession yet. For the ones that follow all the data and history what is your thoughts for year 2023.

I know we don't have a crystal ball, and no one knows the future etc... Just looking for your thoughts from experience, knowledge and research you do, if you have an opinion.

I don't do enough research or follow futures and data, to give an educated guess. I do have an opinion, from reading articles and thoughts from other as to where 2023 may end up. What I have seen from other is ~15 to 20% gains for 2023 and of course that is their opinion.

Again, we won't know until 2024 what do you think?

 

[skipro33]

Without a doubt, the stock market will soar in 2023 because the bottom is gonna fall out of the labor market. IF diesel prices can get back under control, it will be even better, but I think we'll get back to the all-time high of 36,800 before the end of the year.

I know, that's only 7%, but that's my prediction: 7% by end of the year.
Dow all time high was 36,800 Jan. 4th, 2022, and at 34,300 today. 34,300 X 1.07 = 36,701

 

[street]

Without a doubt, the stock market will soar in 2023 because the bottom is gonna fall out of the labor market. IF diesel prices can get back under control, it will be even better, but I think we'll get back to the all-time high of 36,800 before the end of the year.

I know, that's only 7%, but that's my prediction: 7% by end of the year.
Dow all time high was 36,800 Jan. 4th, 2022, and at 34,300 today. 34,300 X 1.07 = 36,701

I can say those points you stated are the same reasons for optimism from what I have been reading. Job markets, inflation, fuel prices and hoping for a more normal life after the terrible covid years are a huge plus for sure for economy.

Thanks for your thoughts and I do agree with your thinking.

 

[W2R]

I think it will be an emotional roller coaster for most of us. We'll read articles by those without a clue who sound logical but are making predictions based on nothing firm or substantial. Some of us will take chances and lose everything. Others won't and will kick themselves for not taking that chance and making a fortune.

When it's all done, we'll all tell people that we knew all along what was going to happen. Those of us who end up having to go back to work will say they missed the social interaction. Those whose portfolio did really well, will never admit that they just got drunk and flipped a coin.

OK, OK, you want our educated guesses and not just a repetition of "same-o, same-o".

My educated guess is that those who know, are already rich and powerful and aren't going to TELL us what they expect. My advice is to look for the richest, most influential, most brilliant investor, pay close attention to what he says to do, and then instead of that do nothing.

P.S. - - Frank says, if you must, say what, or say when, but NEVER say both what and when. The time frame is already built into the question, so saying what will happen is pretty unlikely to give us a correct answer.

 

[MarieIG]

^^^^^^^^ A lot of wisdom in that post

 

[njhowie]

We still are in a Bear market with ~20% down market from 2021 to 2022. Still a rollercoaster and sideways market from day to day and really nothing unusual about that.

We haven't officially been declared in a recession yet. For the ones that follow all the data and history what is your thoughts for year 2023.

I know we don't have a crystal ball, and no one knows the future etc... Just looking for your thoughts from experience, knowledge and research you do, if you have an opinion.

I don't do enough research or follow futures and data, to give an educated guess. I do have an opinion, from reading articles and thoughts from other as to where 2023 may end up. What I have seen from other is ~15 to 20% gains for 2023 and of course that is their opinion.

Again, we won't know until 2024 what do you think?

I think you first need to take a step back and look at what "the market" means in context when you say "the market is down 20%". You're talking S&P500, where the top 5 companies comprise almost 20% of the index value, and 4 of those 5 are tech heavyweights. So, I think that what happens to "your market" is going to be highly dependent on where tech goes.

If you're looking at DJIA, it's only off 5% from 52-week high.

 

[RobbieB]

No research, no emotion, no opinion. Same as it ever was.

 

[street]

I think you first need to take a step back and look at what "the market" means in context when you say "the market is down 20%". You're talking S&P500, where the top 5 companies comprise almost 20% of the index value, and 4 of those 5 are tech heavyweights. So, I think that what happens to "your market" is going to be highly dependent on where tech goes.

If you're looking at DJIA, it's only off 5% from 52-week high.

Thanks for your comments, your intelligence in the financial world is very superior to mine. I'm someone who don't stand a chance to debate your data you have shown.

But if a portfolio has 100% equity funds, I'm sure they may have more in losses than 5% from the high, till end of 2022.

My question is we are still in a bear market not a recession, if someone has an educated guess or uneducated guess what the year may bring. Share it.

 

[pb4uski]

The economy is not the stock market and the stock market is not the economy.

On the economy, I think we'll have an economic slowdown, a relatively soft landing with a mild recession in 2023 being the worst case.

On the stock market, I think the bear will be around for a while. The S&P 500 P/E ratio is still 39% higher than its historical average and earnngs are declining. I expect P/E compression and a decline in earnings in 2023.

 

[street]

The economy is not the stock market and the stock market is not the economy.

On the economy, I think we'll have an economic slowdown, a relatively soft landing with a mild recession in 2023 being the worst case.

On the stock market, I think the bear will be around for a while. The S&P 500 P/E ratio is still 39% higher than its historical average and earnngs are declining. I expect P/E compression and a decline in earnings in 2023.

Thanks pb4uski. That is a great chart.
The economy is not the stock market and the stock market is not the economy. That is true and that is something I did learn here.

 

[mikes425]

The economy is not the stock market and the stock market is not the economy.

On the economy, I think we'll have an economic slowdown, a relatively soft landing with a mild recession in 2023 being the worst case.

On the stock market, I think the bear will be around for a while. The S&P 500 P/E ratio is still 39% higher than its historical average and earnngs are declining. I expect P/E compression and a decline in earnings in 2023.

+1

 

[matjung]

My impression for the moment is that a lot of indices do not measure the developments at the markets well. A lot of stocks went up by 30 to to 40% whereas the stock indices went up by only 10 to 20%.
In some contries, rising interest rates means that the present value of pension obligation goes down, then equity improves, the equity ratio improves. Some balance sheets look better because of rising rates!
At the same time, the number of zombie companies that finally default goes up.
Given the crisis around (mainly in Europe), the unemployment rates are near all time lows. Private and Public consume seems to stimulate economies despite severe issues at some industrial, real estate and property companies.
Maybe the relevance of highly aggregated macroeconomic indicators is going down and the importance of sector indicators goes up.
low unemployment numbers means, there will be inflationary pressure.
This time, the low skilled worker may experience a salary rise, and the high income earner may have to accept a rate cut. Some ultra rich are still ultra rich, but less rich then before. Demand for overpriced luxury goods like Personal A380, or Cruise Ship may go down.
Demand for pricey hand bags, shoes and jewellery is still high.

 

[Koolau]

No crystal ball here. Seems like volatility may be the name of the game but who knows. Heh, heh, 50:50 chance the markets will end higher (or lower) at the end of 2023. Take that to the bank.

 

[njhowie]

My impression for the moment is that a lot of indices do not measure the developments at the markets well. A lot of stocks went up by 30 to to 40% whereas the stock indices went up by only 10 to 20%.

That is always going to be the case. That is what diversification gets you. By the same token, lots of stocks went down 30 to 40% and the index went down only 20%.

 

[Midpack]

No research, no emotion, no opinion. Same as it ever was.

+1. Market predictions are a waste of time. My time horizon is still 20-30 years.

I think it funny how often people ask ‘I know no one knows, but what do you think?’

 

[Jerry1]

Street - your question is one that we’d all like to ask and get an answer to but there just isn’t one. Take 2022 for example - who knew there would be a war between Ukraine and Russia. It always cracks me up that when I look at the news feed regarding the financial markets, there is almost always an article about how great the future will be and one about how the bottom is about to drop out.

Personally, I feel pretty good about 2023, but of course anything could happen. About the only thing I feel with some confidence is that I don’t see interest rates dropping significantly. I think this is a good time to get some interest income. Though I’m keeping my duration short - like no more than two years and one year being my preference.

 

[MichaelB]

No research, no emotion, no opinion. Same as it ever was.

Once in a lifetime?

 

[donheff]

No clue. I'm sticking to the plan.

I do expect some artificial debt ceiling crisis fallout that could cause significant disruptions but there is no way to predict how it will play out. So, stick to the plan.

 

[street]

Street - your question is one that we’d all like to ask and get an answer to but there just isn’t one. Take 2022 for example - who knew there would be a war between Ukraine and Russia. It always cracks me up that when I look at the news feed regarding the financial markets, there is almost always an article about how great the future will be and one about how the bottom is about to drop out.

Personally, I feel pretty good about 2023, but of course anything could happen. About the only thing I feel with some confidence is that I don’t see interest rates dropping significantly. I think this is a good time to get some interest income. Though I’m keeping my duration short - like no more than two years and one year being my preference.

I have no plans other than do nothing like I have for the 40 plus year of investing either. Yes, no one knows till the year is up everyone knows that. Even me!

There were some great posts on detailed opinions on the future outlook. I also believe interest rates will be more stable for the next 12 months. I also come to believe that inflation may be heading in the right direction. I'm a very optimistic person and always try to see the positive no matter what happens. I think that is why sometimes when I start a thread, I see the hanging to begin. Lol

I always find some good in the articles, that give their view and why or why not. Good or bad it does bring up different angles and issues for others to have an opinion.

Thanks

 

[frayne]

I think 2023 will be a good year for the following reasons; China is opening back up, Russia/Ukrainian war is pretty much a stalemate and some sort of political settlement is inevitable, US Congress remains dysfunctional with split Houses, the US Fed looks to be out in front of inflation and we are coming out of a bear market. All that said, I'm not changing a thing as far as my buy and hold the indexes strategy, which has served me well the last twenty years or so. But again, what do I know ?

 

[matjung]

+1. Market predictions are a waste of time. My time horizon is still 20-30 years. I think it funny how often people ask ‘I know no one knows, but what do you think?’

That is how economics works
You know, with the wrong asset allocation, your value in 30 years time is the same than now, or worse.


Recently (rather 3 years ago) I made a social experiment with a guy (50ish, unemployed, forced early-retiree) about predictions.
Would you imagine that you could easily 5-fold your money within 10 years if only you predicted tomorrow correctly?
He said, no
I asked, would you like to give it a chance?
He said, you're scammer go away
I said, take a Spreadsheet, go over the instruments you know,
enter in the sheet those where you think they go up by 1% tomorrow, and enter a comment, why you think so,
enter also those, where you think, they go down, by 1%,
and the ones where you have no glue.
Within a few quarters, the guy stopped being an Early-Retiree and is now managing his money successfully.
Predicting the next 12 months is of course still wasting your time.

 

[Car-Guy]

Based on my past performance/predictions, stocks are "very likely" to soar to new heights this year. (Why, because I've moved all of my stash into fixed income investments and plan to stay there in 2023.) That includes, my 401k, IRA's, and extra tax paid cash. I keep about a years worth of spending money in my checking accounts but other than that, I'm all in.

 

[Bigdawg]

Street - Take 2022 for example - who knew there would be a war between Ukraine and Russia.

I did. But, I also thought China would go into Taiwan. I certainly didn't think the market would lose 20%+. But knowing Russian was going into Ukraine left me nothing really actionable.

I'm in for the long haul believing that once again markets will reach a new all time high. When? Who knows. I think it may happen late in 2023 or early 2024. Between now and then I am ready for a 10-15% drop. I am still adding to my equities so no issues for some down months (even years). Heavy ROTH conversions starting in about 4-5 years. 15 years from now when ROTH conversions are complete I will start limiting my exposure. Eventually going to a 75/25 AA. Now I'm at 97/3 with 3 being MM/CD/cash. Plenty of COLA pensions-that's why heavy on equities.

 

[Kalm]

The worst is yet to come

With inflation being closer to over 10% contrary to what the media might be reporting, I think the worst is yet to come! Just look at the high price of food, clothing, rent etc. After all it doesn’t take a rocket scientist to tell you what’s obvious! The Feds want you to believe that they have control on inflationary spending but you can’t undue the trillions of dollars that were spent in the last few years with a few rate increases. IMHO only an increase in GNP can offset the debt accumulated. With a tight labor market, companies will have to raise their prices to attract and retain desirable employees. If people still continue to purchase while prices are high, their is no incentive to lower prices. Just like government committees, when one is formed it takes forever to dissolve. I think it will be rollercoaster ride for the market with highs and lows speckled throughout the year. But then what do I know?

 

[Midpack]

With inflation being closer to over 10% contrary to what the media might be reporting, I think the worst is yet to come! Just look at the high price of food, clothing, rent etc. After all it doesn’t take a rocket scientist to tell you what’s obvious! The Feds want you to believe that they have control on inflationary spending but you can’t undue the trillions of dollars that were spent in the last few years with a few rate increases. IMHO only an increase in GNP can offset the debt accumulated. With a tight labor market, companies will have to raise their prices to attract and retain desirable employees. If people still continue to purchase while prices are high, their is no incentive to lower prices. Just like government committees, when one is formed it takes forever to dissolve. I think it will be rollercoaster ride for the market with highs and lows speckled throughout the year. But then what do I know?

Actually inflation has trended down for six months, but we can’t know what direction it will go from here despite the trend. Many experts are predicting inflation will be down to about 3% by the end of 2023. But that guess is no better than any.