Through all the challenges, newfound opportunities, and every high and low we’ve experienced during the last couple of years, it’s no surprise why we might be striving for more balance in our lives. Whether it’s reading the news about the global economy or what’s happening in our local communities, the news we’re hearing on a daily basis has created unrest for most of us. But with resilience, perspective, and the support of close connections, we can navigate through it all and regain our sense of equilibrium. Even after another dizzying year, as 2022 proved to be.
After two years of disruption due to the COVID-19 pandemic, we were searching for some kind of return to normalcy, while at the same time, still experiencing the aftereffects of the pandemic. Some of those aftereffects included the imbalances created by the fiscal, monetary, and public health policy put in place to address the pandemic—and the process of addressing those imbalances has been disorienting at times. If 2022 was about recognizing imbalances in the economy and starting to address them, we believe 2023 will be about setting ourselves up for what comes next as the economy and markets find their way back to steadier ground—even if the adjustment period continues.
The Federal Reserve (Fed) spent 2022 aggressively fighting inflation by raising interest rates. In 2023, we expect the Fed to find that point where it can stop raising rates, as inflation starts to come under control. The Fed’s efforts to control inflation throughout 2022 pulled interest rates off of extremely low levels that were historically unprecedented, which made things challenging for bond investors and borrowers alike.
Stock market expectations may see some potential for realignment heading into 2023 as well. The projections for certain sectors such as communications and consumer discretionary became too high in 2022 following a decade of low rates. We expect 2023 will likely be more focused on the opportunities that exist within more traditional businesses within sectors such as Healthcare and Technology.
The disruptions may not be fully resolved and there may be more challenges to come, but progress toward finding balance is well underway. And when those disruptions hit the market, it can be hard to find our footing and stay the course. Those are the times when sound financial advice is more valuable than ever, as it helps us find our center, remember our plan, and stay focused on our goals.
Please contact me if you have any questions.
Bryan Foronjy, CFP®
Founder and Principal Wealth Manager
CA Insurance Lic. # 0F84170
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Bryan Foronjy is a registered representative with, and securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Strategic Wealth Advisors Group LLC, a registered investment advisor. Strategic Wealth Advisors Group LLC and Foronjy Financial are separate entities from LPL Financial.
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All index data from FactSet.
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