☀️ Welcome to 2023!

Well, time to get back to work!

Before we get started I want to thank Jules Acree for the very kind words she shared about Rate of Return inside of her Sunday newsletter — and a very warm welcome to the +346 of you who ended up subscribing to us because of it!

We hit 9,000 on New Years Day because of her shoutout — and we’re incredibly grateful. Here’s a recent post that might be helpful for new subscribers!

Next, I want to thank the 197 of you who ended up creating accounts on Quantbase in efforts to subscribe to my Dividend Growth Fund. I’m optimistic about the fund’s future. For those curious, read the bottom of this post.

My $10K is now fully invested and we’re enjoying the journey.

As it relates to the New Year, we’re a lot more optimistic than you may think.

Do we still believe the market will experience another leg lower? Yes. 

Do we think that the majority of major names likely haven’t yet reached their bottom dollar? Yes.

But that doesn’t mean we’re not both eager and excited for the opportunities that are coming for level-headed investors in 2023.

At time of writing, the SPY is down exactly -20% from a year earlier. Stocks have certainly taken a plunge over the past year, but you can see below — not every recessionary period means the market aimlessly falls for an extended period of time:

It’s also interesting that the two most recent recessions have each been outliers in certain ways:

• The 2008 recession was by far the deepest (worst stock market performance, the S&P 500 bottomed out at -54% losses) and also the longest at 546 days.

• The 2020 recession had the steepest immediate sell off, but was also the shortest recession on record at 60 days.

How about we look at what happened in the years following (lighter color tone):

A decent amount of “up and to the right” — but also a whole lot of volatility.

For those interested in trying to time the market, 2023 is going to be a lot of fun! Interest rates are poised to remain elevated well into the second half of 2023, the Federal Reserve is forecasting an increase in unemployment, and early signs of an economic slowdown are popping up everywhere.

Of course, a “market bottom” could be on the horizon — but I personally don’t plan on timing it all to a tee. We’ll be buying the weakness — and sharing those “buys” with you all every step of the way.

Money Moves for 2023:

Quickly touching on things to consider as you assess your 2023 money situation.

1. Revisit my Bear Market Playbook — linked here (specifically the bottom section).

2. Create a budget — You can have my free budgeting template sent directly to your email by following this link.

3. Plan your 401K & Roth IRA contributions — Keep in mind that Congress recently amended (and mostly improved!) many retirement laws. The limit for annual IRA contributions has increased to $6,500 and the limit for annual 401(k) contributions is now $22,500. Here’s a short TikTok video about them.

4. Consider your portfolio strategy — Here’s my recent investing re-evaluation, portfolio reveal post, and a link directly to my portfolio tracker (subscribers-only).

5. Think about your credit — Difficult economic times could mean you’ll need access to more credit. Better yet, if you’re carrying high-interest credit card debt — pay it off! Paying off debt accruing interest at 21% is a much better “return on investment” when compared to only earning 10% in the stock market. Here’s a link to our Credit Score Explanation.

What to Watch the Rest of This Week:

A (very) abbreviated Week Ahead before we get back into our regular cadence next week.

Earnings at a Glance

Hidden in what is certainly a quite dull week of earnings are names we’re excited to report back on in this Sunday’s edition of Week in Review.

Economics at a Glance

• Wednesday (1/4): FOMC Minutes, ISM Manufacturing Index, Job Openings & Quits

• Thursday (1/5): ADP Employment Report, Speech by STL Fed President Bullard, Trade Deficit

• Friday (1/6): Factory Orders, ISM Services Index, Jobs Report (Including Unemployment Rate), Speeches by ATL Fed President Bostic, KC Fed President George, Richmond Fed President Barkin, and Fed Gov Cook

The Consumer Electronics (CES) Show

CES in Las Vegas is considered to be one of the premier conferences for consumer electronics, retail, and other categories of companies to debut new product offerings, give updates on long-standing developments, and reveal next-generation concepts (such as the Samsung phone shown above).

Some of the key topics that are expected to be emphasized include digital health, mobility, the metaverse, AR/VR headsets, and of course — AI advancements amidst the popularity rise of Chat GPT.

Tesla (TSLA) and EV Deliveries

While Elon Musk continues to grow engagement on his newly-purchased social media platform — Tesla (TSLA) stock has been getting absolutely crushed.

On the first day of trading in 2023, Tesla closed down -12% — around $108 per share. This notched the stock’s largest drop in more than two years, as the company has now lost more than $950 billion in value since its peak in November 2021. 

Some of my favorite Twitter threads right now:

If you’re starting your investing journey or want to change to a cleaner, social-focused investing platform, consider visiting Public.com.

Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.