A Fresh Start For Stocks: My Plan For 2023

2023 is expected to be a tail of two halves for the stock market

Author

Mark Roussin
January 03, 2023

Hello Everyone,

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Market Talk ⏪

To begin, I would like to wish you a healthy and happy New Year!

Thankfully 2022 is behind us and we can turn the page on what was the worst period for stocks since 2008. On the year, the S&P 500 ended down 19.4%, but many growth stocks were down much more.

Just look at the 2022 results from these stocks:

  • Apple: -28%

  • Microsoft: -28%

  • Alphabet: -39%

  • CrowdStrike: -47%

  • Netflix: -50%

  • Amazon: -51%

  • Meta Platforms: -64%

  • Tesla: -69%

  • Netflix: -50%

  • Shopify: -75%

On the brighter side, the broader market has been higher 81% of the time following a year in which the market was down.

Here is a tweet I sent out this past weekend also related to the market following a down year.

As I strive to do, I am always looking to be completely transparent with my subscribers, which is why I post monthly portfolio updates for premium subscribers every month. I just posted my December Portfolio update on Monday.

My portfolio was able to squeak out a small gain on the year, and I will be looking to build upon that in 2023.

Here are a few of my thoughts for 2023:

  1. Do not fight the Fed: The Federal Reserve took an aggressive approach to combating high inflation with several rate hikes in 2022, something they plan to continue doing in the near term. The pace at which they are hiking rates appears to be slowing, but no pause is in sight. The Fed was late to act and now they do not want to risk pausing too soon. They want to see the workforce and wages impacted before pausing.

  2. Cash Flows Matter: There are many new investors out there today, after a boom in retail investors getting involved with investing and the meme stock craze. It was great for a few years when it seemed like everything that you invested in turned to gold. 2022 reverted back to the old ways of investing and long gone are the 40x P/E stocks and other insane valuations. Value investing is a thing again as investors look for valuation and companies that actually make money and return money to shareholders. This is one reason my portfolio performed the way it did in 2022. I expect this theme to continue into 2023.

  3. Recession Sectors: We are headed for likely the most anticipated recession of our lifetime. With that being said, money managers or portfolio managers like yourselves, are looking to increase their defensive positioning. Sectors that tend to do well during recessions include: Consumer Staples, Health Care, and Telecommunications tend to perform well.

Those are a few things to consider when positioning your portfolio for 2023. The year-end estimates are all over the map, but the majority of notable money managers have the S&P 500 ending the year in the green. Slow in the first half, with a bounce in the back half.

If this plays out like that, long-term investors have a great opportunity to add positions at these depressed levels. Remember to jump in over time, as trying to time the market is a difficult and dangerous game.

Portfolio Update 📰

As I mentioned above, I recently published my December Portfolio Update for premium subscribers to see. It included a snapshot of my portfolio, in addition to all the trades I made throughout the month.

For ONLY $1 PER DAY you can become a premium member and enjoy all the perks that come along with it. Those include:

  • Monthly Portfolio Updates

  • Earnings Recaps

  • 2 Individual Stock Deep Dives Per Month

  • And More

If there is a specific stock you would like me to consider for a future Deep Dive, then send me an email at [email protected] and I would be happy to consider it.

US Markets 🇺🇸

Here is a performance summary for US Equities:

Here is a look at US Treasuries:

The Fear & Greed Index measures market sentiment based on the following seven factors: put/call ratios, junk bond demand, stock price breadth, market volatility, stock price strength, safe-haven demand, and market momentum.

When it comes to the Fear and Greed Index, we have seen a fast move from a reading of ‘Extreme Greed” just three weeks ago to now having a reading of Fear once again. The past week however remained mostly unchanged. Currently, the index has a reading of 37, which is not much change from the prior week reading of 39.

Earnings on Deck 💰

No notable earnings releases this week!

Notable Analyst Updates 📝

  • A few growth stocks, especially Tesla saw some price cuts last week, but besides that, analysts were pretty quiet on the week.

This Week 📆

Monday

  • New Year’s holiday (markets closed)

Tuesday

  • S&P Global manufacturing PMI

  • Construction spending

Wednesday

  • Vehicles sales for December

  • ISM manufacturing

  • FOMC minutes

Thursday

  • ADP payroll data

  • Weekly initial jobless claims

  • S&P Global services PMI

Friday

  • Employment Report

  • Factory orders

Other Resources 📺

If you have not done so yet, definitely check out my growing YouTube community where I publish weekly videos on Dividend Stocks I am looking at.

Here is a look at my latest video in which I discussed 5 of my favorite ETFs for 2023:

I also recently published my Top 10 REITs for 2023:

Here are a few others of my latest videos:

If you enjoyed the newsletter, leave a LIKE and COMMENT down below. Also, if there is someone that could benefit from this newsletter, consider sharing it.

Have questions? You can email me directly at [email protected].

Cheers to 2023!

Mark

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