I hope everyone had a great Christmas holiday and Happy New Year. Bring on 2023!
To summarize the year we had to endure, we had 3 different large global events take place. Like China’s zero tolerance Covid shutdowns, Russia invading Ukraine and inflation/interest rates. Typically one of these events would be enough to trouble markets and we were unfortunate enough to have all of them. This year was one of the worst markets we have had in a long time and we have not seen this much pessimism since the 2008 financial crisis. Lately it seems everywhere you turn there is negative articles and opinions on the markets. Negativity draws attention and we caution not to get wrapped up in all of it. The majority of opinions seem to be negative/catastrophic but we are not in that camp.
We are happy to say that our disciplined strategy did its job and we held up very well during 2022. We achieved results on average much better than the overall indexes and we accomplished what we set out to do when things get volatile. The goal when markets get as nasty as they have is to preserve as much of our capital as possible to make the recovery much easier once we weather the storm. We succeeded that part of the strategy. Now we look towards the opportunities at hand.
What we expect for 2023.
We think a recession will be “officially” declared. We believe we are already in one even if the official definition of two negative quarters of growth has not yet been met. But we do not think a recession means catastrophe. We believe a recession will be moderate and a lot of that outcome has already been priced into the current negative markets we have experienced. We believe inflation has peaked and will be coming down significantly. This means interest rates are very close to their top for this cycle. We feel this will be catalysts to the market beginning a recovery. Risks to this outlook are mainly some extreme event in the Russia/Ukraine conflict or inflation not moderating like we expect. So far nothing we monitor suggests any of these outcomes but we remain aware of them.
So far markets have behaved how we have anticipated and we believe the timing is favorable for new investments. We also think the assets we currently have are financially strong, will continue to retain value, pay us good income and recover strongly when the markets turn upward.
If you have any questions about your individual situation, feel free to reach out.
Tchabushnig Wealth Group.
This communication has been prepared by Alan Tchabushnig and expresses the opinions of the authors and not necessarily those of Raymond James Ltd. (RJL). Statistics, factual data and other information are from sources RJL believes to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. It is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., member - Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a member - Canadian Investor Protection Fund.