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2023 Market Outlook

RL152 — 2023 Market Outlook

On the Retirement Lifestyle Show, Roshan Loungani, Erik Olson, and Adrian Nicholson discuss what investors can expect from the U.S. and global markets in 2023. They break down topics like the market outlook for 2023, the presidential election cycle theory, and the available opportunities in emerging markets.


[00:00] Introduction

[01:53] Market Outlook and Expectations For 2023

[04:53] Performance of the S&P 500 The Year Before an Election

[08:10] The Presidential Election Cycle Theory

[12:56] Remaining Uncertainty in 2023

[15:21] To What Extent are Things Priced In?

[18:16] Opportunities to Look Out For in Emerging Markets

[20:28] Factors Working in Favor of Emerging Markets

[24:18] Thoughts on Short-Term Government Bonds

[30:05] Bond Markets and Future Rates

[33:36] The Best Markets to Weather a Recession According to Blackrock

[35:02] How to Approach Mortgage-Backed Securities

[37:10] Undervalued Stocks and What to Expect

[44:10] 12 of the Best Income Investments For the New Year

[45:55] Municipal Bonds and Foreign Dividend Paying Stocks

[47:17] Parting Thoughts


For more links and the full show notes keep scrolling down!


Roshan Loungani can be reached at roshan.loungani@aretewealth.com or at 202-536-4468.


Erik Olson can be reached at erik.olson@aretewealth.com or 815-940-4652.


Adrian Nicholson can be reached at adrian.nicholson@aretewealth.com or at 703-915-8905.

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Full Show Notes:


2023 Market Outlook

What should you expect from the global markets in 2023? Will we go into a recession, will the dollar continue its bull run, or will we see a year worse than 2022? Fortunately, almost all economic reports are hopeful that 2023 will be a good year - although with a few bumps and bruises. Some even go as far as predicting falling inflation, a Fed interest rate pivot, a soft economic landing, and stronger consumer spending. The hope is that we don't see a repeat of 2022.

Market performance last year had a big impact on most investors' portfolios, so it makes sense that a lot of investors, especially retirees, are a little cautious this year. That said, for this year, just hold on. Hedge and pivot your portfolio to ride out the chaos that could come but never lose calm.


The Presidential Election Cycle Theory

The Presidential Election Cycle Theory is a theory built on the belief that the stock market performs differently depending on which year of the presidential election cycle it is in. According to the theory, year one after an election is typically the worst for the stock market. Year two is a little better, and the third year is the best. The year before an election is usually positive due to the Federal Reserve's monetary policy and investor sentiment.

If this theory is anything to go by, then 2023 might be a great year for investors. In fact, as Adrian points out, since 1927, the S&P 500 has always been positive the year before a presidential election. The year during the great recession is the only year where this trend failed to materialize. However, it is important to note that this is a theory and not a universally accepted fact, and that the stock market's performance can be affected by various factors.


All opinions expressed by podcast hosts and guests are solely their own. While based on information that they believe is reliable, neither Arete Wealth nor its affiliates warrant its completeness or accuracy, nor do their opinions reflect the opinion of Arete Wealth. This podcast is for general informational purposes only, and should not be regarded as specific advice or recommendations for any individual. Before making any decisions, consult a professional.

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