We all know the markets spent 2022 in a slump with US stocks down about 20% and US bonds down 13%. The driving factor of losses in both stocks and bonds was high inflation, multiple Fed rate hikes, as well as geopolitical turmoil. During times like these, the good news often goes unnoticed. We think it’s prudent to acknowledge the last quarter of 2022 was marked by gains in both stocks and bonds, both domestic and international, with international developed stocks increasing 16% during the quarter.
Are we at the beginning of a new market rally? It’s possible. Only time can tell us the answer to that question. As long-term investors, it’s critical not to make decisions based on a feeling or what the financial news analysts are speculating. Rather, staying the course is the best course of action.
Whatever 2023 may bring, sticking to a sensible financial plan based on your own life circumstances will give you the best chance of success. So live life to the fullest and pay little mind to the bumps along the way.