We have made it into the New Year and there is no sign of anything like a Jolly Elf Rally.
The only thing the same is a holiday-shortened trading week.
The story for 2022 was that what took you up took you down.
The love affair with FANG stocks ended badly.
It will be interesting this year what Cathie Wood of the Ark Fund will come up with for an encore for such a poor year.
Buying on the dips has yet to result in anything but further losses.
It sort of works until it doesn’t.
Looking out in the new year might leave investors looking for a little security instead of risk.
Bitcoin gave up over half its value closing the year near $16,000 amongst concerns over fraudulent conduct at FTX.
China was closed down due to COVID.
Russia continues to attack Ukraine to little or no good. North Korea and Iran are powder keys just needing a match.
Recession is the prediction of the day.
Housing prices have dropped and inflation is still high.
I would go on but it is starting to depress.
What is an investor to do under such dire elements? Some would say that you look for value and buy at the bottom.
The problem is defining the bottom.
I suggest that you first might look to bonds offered by the Treasury Department.
They are like TIPS and pay above the inflation rate and adjust accordingly.
At one point last year, they were paying over 9% with inflation at 8%.
They have adjusted down a bit.
You can buy up to $10,000. With that in place you might want to contact your broker. Schwab was offering 3-year CDs that paid over 5%.
I realize this isn’t beating inflation, but the losses you suffered last year in the market didn’t help either.
Speaking of yield, you might look at Energy Transfer Partners or Pioneer Resources.
In the first case you are buying a transporter via pipeline for natural gas.
The second is a play on natural gas production and the issue of a special dividend each quarter based on earnings.
This all assumes that there will continue to be an energy industry.
To think anything will change within the next decade is to ignore the reality of how important fossil fuels are to our everyday life.
While tech has proven troublesome in 2022, it is as essential as fossil fuels.
You just might have to look at those that use the technology in their products that are the production elements of our economy. You could look at Deere that’s making tractors become unmanned drones.
Caterpillar will not be far behind.
All is not lost, just another cycle to deal with along the way.
Always remember that someone’s misery can be your opportunity.
