January came out with a BANG! The stock market posted impressive returns with all major market indices posting positive results. While we hope this trend continues, we do not think we are out of the woods yet…
- Equity Markets are booming….so far:
- S&P 500 = up 6.30%
- Nasdaq Composite = up 10.7%
- S&P 400 Mid Cap = up 9.2%
- S&P 600 Small Cap = up 9.4%
- Other indices are posting positive results as well:
- Lehman Brothers Aggregate Bond Index = up 4.05%
- Vanguard Real Estate Index (VNQ) = up 13.60%
- MSCI EAFE Index = up 9.83%
We have seen strong growth coming from Europe (up 11%) and China (up 13%). China is opening after being on lock down for 3 years due to COVID. There is not only a lot of pent-up demand, but also supply chain issues are being worked through.
Leading the way are individual stocks. Many firms that were hit hard last year have posted stellar results in the first month of the year:
- Disney (DIS) = down (-20.62%) in 2022; up 30.31% in 2023
- Meta (META) = down (-41.56%) in 2022; up 56.86% in 2023
- Salesforce (CRM) = down (-22.39%) in 2022; up 31.71% in 2023
- Lucid (LCID) = down (-56.39%) in 2022; up 76.72% in 2023
Remember the markets were up quite a bit in 2021. 2022 was NOT good, to say the least. In many cases we’ve seen the positive results of 2021 ‘washed away’ with 2022 performance – net/net investors are flat over the last two years. But investors tend to focus on the loss of 2022, not accounting for the 10+ yr. bull market of amazing returns. Overall, most investors are net positive over this time frame.
While we do not think this extremely positive trend will continue untethered, the numbers prove that recoveries can happen while you are not looking. This is why we have counseled clients to stay invested during this downturn! The way to recoup losses is to stay invested and work with the market. You aren’t invested in ‘bad’ funds or stocks, we are simply in a down market.