Cloud Gazing: Reflecting on the 2023 Market and looking ahead to 2024

Cloud Gazing: Reflecting on the 2023 Market and looking ahead to 2024

| February 02, 2024

Cloud Gazing: Reflecting on the 2023 Market and looking ahead to 2024

As I watch the clouds roll across the valley, colliding with the Wasatch peaks, I'm struck by their persistence. They hit against the mountains as if encountering an obstacle, only to gracefully find their way over or around. This natural spectacle reminds me of the economic journey we've been on this past year. In 2023, the markets, like these clouds, maneuvered through obstacles, defying expectations, and providing us with lessons for the future.

A Year of Surprising Growth and Resilience

2023 began with recession fears, high inflation concerns, and a loss of confidence due to a quickly spreading banking crisis, yet by year end proved yet again that markets are inherently unpredictable and resilient. The US market, in particular, demonstrated remarkable strength. The broadly diversified S&P 500 surged by about 25%, led higher by tremendous growth in a select few technology stocks. Meanwhile, foreign stocks represented by the MSCI All Country World Ex US Index, had a healthy gain of about 15%. This robust performance reflects how reality can exceed expectations, even in the face of geopolitical conflicts and economic challenges. Last March, as people watched news of the bank failures, our focus shifted to deposit insurance, bank stability, and possible spill-over to more banks or other parts of the economy. Now it seems almost as if it never even happened. 

Embracing the Lessons of 2023

Last year reminded us of the importance of planning over predicting. While forecasts can serve as a general guide for us, they are often outpaced by the reality of market movements. The resilience of the economy, despite challenges such as the banking crisis and global tensions, underscores the need for a well-thought-out long term financial strategy that can weather any cloudy day or storm, while allowing us to focus on the bigger picture.

Looking Ahead to 2024

As we venture into 2024, let's approach it with the same flexibility and grace as the clouds navigating the Wasatch peaks, while we carry forward the lessons learned from the past year. The economy's continued strength offers a promising outlook, yet as always, we remain prepared for a range of possibilities. Geopolitical developments, interest rate dynamics, and the upcoming presidential election in the US are just a few factors that may shape the short-term financial landscape. In navigating these changes, let's approach our financial planning like watching the clouds continue their dance over the mountains as if in slow motion - with patience, adaptability, and an appreciation for the unexpected.