2022 was a dismal year for investors, the U.S. Federal Reserve and other central banks around the world raised interest rates far more than anyone expected because inflation was far worse than anyone expected. However, I believe that 2023 will be a better year for investors and offer the following resolutions to consider as you contemplate the year ahead.

Don’t get spooked when things get tough

The biggest mistake investors made during the financial crisis was moving out of equities at the bottom of the market, thereby locking in losses and subsequently missing out on the strong stock market rebound that followed. This year we are likely to have some geopolitical, economic and/or market events that will strike fear into the hearts of investors. When that happens, remind yourself that no matter what the event, over time the stock market has a way of shaking it off, and climbing back to new highs.

Expect the Unexpected

When analysing the performance of the different sectors in the market it is easy to see how quickly things can shift. Today’s leaders can be tomorrow’s losers (think technology 2021 vs. 2022). Ensure your portfolio stays diversified across asset classes and be sure to include sectors that appear to be poised for better performance going forward; in my humble opinion, this year that includes bonds.

Don’t wait for the ‘perfect’ time to invest

Everyone always wants to know when the markets have bottomed; unfortunately, we will never know that until we are staring at it in the rear-view mirror. This year we are expected to see volatility in the first half of the year while we wait for a pause in interest rate hikes and inflation to come down. There is also an expectation that earnings will be downwardly revised in the coming months, which could spark more volatility. In this type of environment dollar-cost-averaging can be a prudent strategy for your investment dollars.

Stick to your investment plan

It is easy to get side tracked after a year like 2022, wondering if this time is different. Stop listening to the noise and focus on the things you can control. When it comes to investing, that includes creating an investment plan, adhering to that plan, and continuing to invest in your plan; that is the only way to ensure you achieve your long-term goals, regardless of short-term market performance.

As we look ahead to 2023, I believe things will improve as the year progresses, and I expect that 2023 will be a much better year for investors.

I am always here to answer your questions and provide guidance, if you want to make sure you are positioned properly for the year ahead, don’t hesitate to give me a call.

Have a great weekend,

Tracey

Source: original article Six New Year’s resolutions for investors, by Kristina Hooper, Chief global Market Strategist, Invesco, posted 01-04-2023

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