What a remarkable year with the S&P 500 gaining 24% for the year and close to the all-time high set in January 2022.
Much of this gain happened over the last nine weeks of the year.
I don’t care what name you call it, but that is such a boost to everyone’s financial fortunes.
Of course, now you want to say, well what about next year?
It just seems so hard for me to believe that this can happen again.
We set so many records over the last nine months.
A replication or improvement challenges the odds.
You only have to see what world geopolitical events can do to the economy.
The war in Ukraine severely impacted inflation as did the pandemic.
We now have problems with shipping in the Red Sea that could add to the cost of products, much less the impact on energy that was giving us some relief of late.
You start pushing prices north and all the expectations of multiple rate decreases could go right out the window.
This whole situation with Iran is not going away.
We have an economic war with China, but Iran believes in bombs and bullets.
Moreover, they have no qualms about talking about the demise of the Western economy.
I’m far from forecasting a black swan event, but there are so many variables that can and will impact the world economy.
All the consumption that supported the markets in 2023 will have to be paid for in 2024, due to significant rise in personal debt and that is dwarfed by the Federal debt.
Can anyone say higher taxes?
Election years are historically good for equities and I doubt seriously that the Federal Reserve will do anything to rock the boat.
I worry this Presidential election will become so hostile that January 6 may end up looking like a tea party.
One of the bedrocks of our country is the peaceful election process that is held to a standard of conduct that the populace can trust.
I don’t say everything has to be perfect, but it cannot be conducted in the shadow of corruption.
This splitting of the nation into hostile groups dictating to the other is far from what the forefathers had planned.
Such are leaks in the dam that could force serious consequences.
It seems that this country, despite all of its problems, finds a way to move forward.
I tend to be an optimistic person and try to avoid negative thoughts.
I will take some of my profits off the table and reallocate.
It goes without saying that those who invested in the Magnificent seven have been richly rewarded.
The discussion now will be if it has run too far and a correction is needed.
The good news is there is significant support at 4200.
Being a value investor it wouldn’t hurt me to see a pullback, but it’s hard to see what will move this market anyway but up.
So, cheers to a great 2023 and hopes for a prosperous 2024 for all of you readers and investors.
