Happy New Year and welcome to 2023! We hope that you and your family had an enjoyable holiday season. We look forward to what this new year has to offer.
2022 was rough for investors, with many of the year’s events unforeseen and unfavorable. As we enter the new year, some challenges remain. One primary obstacle, the concern of elevated inflation, has recently looked a little less imposing, while another concern, a projected recession affecting countries around the globe, is still looming. Seasoned investors understand that part of the investment experience is taking a long-term approach and that means potential periods of downward movements. Our primary goal for the new year is to continue to help optimize your journey toward your financial goals. A key component to this is to identify items that you may anticipate needing our assistance with. In order to start the new year proactively, included in this communication is a 2023 Checklist to help you identify items you may want to address with us over the next year.
We enter 2023 with a service goal of exceeding your expectations and providing you with first-class service. We take pride in our ability to understand and effectively respond to your needs and enjoy providing timely information and holistic service to you.
We thank you for giving us the opportunity to help you work toward your financial goals and look forward to a great year!
Looking Ahead to 2023
While there are many aspects to overall financial planning, the following are some specific areas we will continue to watch carefully as we head into the new year.
Interest rate movements continue to be critical for investors. In 2022, the Federal Funds Rate rose from a range of 0 – 0.25% to a range of 4.25 – 4.50%. The Federal Reserve has announced they will continue to raise rates to around 5% in 2023 as a way to combat inflation.
Inflationary concerns are important for investors. In the U.S. during 2022, results for inflation peaked in the fourth quarter and both headline and core Consumer Price Index (CPI) readings showed significant year-over-year declines to end the year. This was the data investors had long been waiting for, and they expressed their approval by sparking quick, but short-lived equity market relief rallies. This initial descent from the inflation summit can be encouraging, but it takes more than one data point to make a trend. Inflation numbers and fears need to be monitored as the 2023 data becomes available.
A main obstacle for investors is that many analysts are suggesting a recession is inevitable. The shift from inflation risk to recession risk reflects the impact of aggressive monetary tightening by the world’s central banks, which have fixated on inflation-fighting at the expense of economic growth. Even with inflation starting to moderate (at least in the U.S.), there is no guarantee that central bank policy rates will follow suit. In fact, in November, Fed Chair Jerome Powell conveyed that rates are likely to remain “higher for longer,” which will bring continued challenges to the economy and investment markets. Economic recovery is still appearing to be affected by the overseas effects of Covid-19 and its variants. We will continue to stay apprised of the direction of recovery efforts and how they are affecting the economy.
Stock Market Valuations
Valuations are used as key predictors of equity returns. Many stock prices have fallen significantly from historical highs, but in tough times valuations become more challenging to estimate. While we cannot predict long- and short-term valuations, we can continue to help you identify your risk tolerance and time horizons. We will also guide you to use practical behavior during times of market volatility.
Your Personal Situation
Your personal situation is always our highest priority. We are here to help you with any financial moves or concerns you have throughout the year. We understand that each individual and household has different goals and needs. We will continue our tradition of keeping you informed of any changes that we think may affect your personal situation.
We enter 2023 with the continued mantra of “proceed with caution”. Having a solid foundation and strategy is critical to the outcome of your financial plans. Revisiting your plan and keeping it current is also a sound practice we feel should be conducted on a consistent basis. Our mission is to provide you with guidance and support on your journey toward your financial goals.
Advisory Services offered through Materetsky Financial Group Inc., a Registered Investment Advisor. Securities offered by Registered Representatives through Private Client Services, Member FINRA/SIPC. Private Client Services and Materetsky Financial Group Inc. are unaffiliated entities. All insurance products are offered through unaffiliated insurance companies. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Materetsky Financial Group, Inc. [“Materetsky]), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from Materetsky. Materetsky is neither a law firm, nor a certified public accounting firm, and no portion of the commentary content should be construed as legal or accounting advice. A copy of the Materetsky’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.materetsky.com. Please Remember: If you are a Materetsky client, please contact Materetsky, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian. Note: The views stated in this letter are not necessarily the opinion of broker/dealer, and should not be construed, directly or indirectly, as an offer to buy or sell any securities mentioned herein. Investors should be aware that there are risks inherent in all investments, such as fluctuations in investment principal. With any investment vehicle, past performance is not a guarantee of future results. Material discussed herewith is meant for general illustration and/or informational purposes only, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice. This material contains forward looking statements and projections. There are no guarantees that these results will be achieved. All indices referenced are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. The S&P 500 is an unmanaged index of 500 widely held stocks that is general considered representative of the U.S. Stock market. The modern design of the S&P 500 stock index was first launched in 1957. Performance prior to 1957 incorporates the performance of the predecessor index, the S&P 90. Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stocks of companies maintained and reviewed by the editors of the Wall Street Journal. Past performance is no guarantee of future results. CDs are FDIC Insured and offer a fixed rate of return if held to maturity. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed.There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. There is no guarantee that a diversified portfolio will enhance overall returns out outperform a non-diversified portfolio. Diversification does not protect against market risk. There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. There is no guarantee that a diversified portfolio will enhance overall returns out outperform a non-diversified portfolio. Diversification does not protect against market risk.