It has been a roller coaster start to 2023!
A month ago, everyone was worried. The market was down 20% in 2022. However, over the last month, the market has surprised everyone and has steadily gone up. In fact, the market is up more than 15% from its lows of last year!
Stocks have been going up at the same time that the news has gotten worse. Companies are struggling, and profit estimates are coming down. There is a wave of layoffs happening, especially at technology companies. Consumers are cutting back on spending. People are worried about the job market. But the market somehow keeps going up.
If you go back and look at the forecasts from December, everyone was predicting that the market would keep going down. No one thought the market would be up 15%. Pundits were predicting, “Stocks will continue their slowdown into 2023, and we could see more market lows …”
This is just another example to show that it’s a fool’s game trying to predict the market. No one was expecting a market rally in January. And no one knows what will happen in February or the rest of the year. Everyone has an opinion, especially all the so-called experts. But they are just as reliable as weather forecasters.
So, what am I doing? Nothing different than what I was doing last year or the year before, for that matter. I regularly keep investing most of my savings in VOO. As I mentioned in the previous post, it is not wise to wait for the market to bottom. No one can time the bottom, and the market typically goes up much before the economic news gets better. Every bear market ends with the start of a bull market.
I am not sure what will happen to the market in the short term, but I am confident that in the long run, it will be higher than it is today.