Who Would Have Thought? 2023 Year in Review.

Who Would Have Thought?

2023 Year in Review

At the beginning of the year, there are prognosticators calling for a major depression in 2024.  2023 is a great example of using what happened vs what was predicted as a key lesson to improve our decision-making (and willingness to be swayed by short-term swings) going forward. This is especially true in the investment realm.

2023 – Lots of Bad News

Late in 2022, market and economic experts didn’t just forecast a recession, they put the probability of a recession occurring at 100%.¹ Then, early in 2023 we witnessed several regional banks fail and predictions abounded that things would get worse.²

We also experienced mortgage rates soaring to their highest level in over 23 years, resulting in a significant drag on the housing market. And, in late Fall, global conflicts increased more with the beginning of a mid-East war – spurring talks of a potential World War III.³

The Danger of Foreknowledge

If you had known these negative events were going to occur, would you have invested? Be honest! These are serious events, any one of which could have derailed the economy and markets.

Yet, despite all the bad news, scary headlines, and dire predictions, the market was up over 25% for the year.⁴

Lessons to Learn

So, what can we learn from 2023 to improve our future investing decisions?

1. Acting on headlines is risky. They may be alluring but they seldom predict the market
2. Markets are complex. A lot of factors go into what makes them go up and down
3. Therefore, it is best to let your plan and my advice guide your investment decisions

© The Behavioral Finance Network and Gates Pass Advisors

1. Bloomberg, Oct 17, 2022
2. Business Insider, Mar 11, 2023
3. Washington Times, October 29, 2023
4. Returns YTD through Dec 28, 2023. Performance includes reinvestment of dividends. The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. All indices are unmanaged and may not be invested into directly. Past performance is no guarantee of future results.

This video is narrated by Jay Mooreland, the CEO of the Behavioral Finance Network – dedicated to educating investors about the ‘gotcha’s’ of mental shortcuts that can reduce investment returns.