At the start of the year, there were widespread predictions of an economic downturn and significant job losses. Corporate America was discussing major cost-cutting measures due to higher yields and increased economic uncertainty, leading money managers to view stocks as unappealing. Market experts anticipated a selloff in the first half of the year.
However, over the last six months, there were only a few isolated bank failures, and the market experienced a brief but swift selloff. Contrary to all the concerns and dire predictions, stocks have actually performed quite well this year. The tune has changed from pessimism to optimism, as Barron’s now declares, “This Market Has Legs.”
Historically, the market has shown a tendency to rise more frequently than it declines. Since 1928, the market has had more years with over 20% gains than years with any degree of losses. Trying to time the market and predict its movements can be costly, as missing out on even a few market rallies can significantly impact overall performance.
The events of the first half of 2023 serve as a reminder that market experts can be wrong, and unexpected surprises can happen. It’s impossible to know precisely how the market will respond to various situations. Therefore, the best investment advice is to rely on a well-thought-out plan to guide decision-making.
BusinessWeek, January 11, 2023
Barron’s, December 19, 2022
Total Return through June 27, 2023
Ben Carlson, Wealth of Common Sense, June 24, 2023
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