Weekend Reading – 2022 Model Portfolio Returns Edition
Welcome to a new edition of Weekend Reading on 2022 Model Portfolio Returns – I hope you enjoy it.
As usual, before delving a little further into the subject, some recent reading on my site as a quick reminder:
These are some Our income needs and wants Budgetary fundamentals must be met in the coming years, including dividend and distribution income.
Recognizing those needs, we want them brick by brick; By meeting these 2023 financial targets.
Weekend Reading – 2022 Model Portfolio Returns Edition
Did you say like???
yes, Sample portfolio.
Whether shorting the index and deciding to hold some individual stocks (like I do…) or strictly index investing for market-like returns, 2022 was an investment year for the ages – but not really in a good way for many.
Officially, in the rearview mirror, 2022 was the worst year in more than a decade for the S&P 500 – losing close to 20% of its value against the US dollar.
If you’re an indexer, have a Canadian bias, and own one of the popular low-cost ETFs in Canada like XIU – you’ve done great. As a proxy for large-cap Canadian stocks, the XIU is down just 6.4% in 2022.
To put 2022 into some perspective, the S&P 500 has not seen back-to-back down years since the dot-com bubble burst between 2000 and 2002.
It makes 2023 time to be optimistic!
Source: @CharlieBilello – Chief Market Strategist @cpiwealth
Or will it???
While Canadian markets are up about 5% year-to-date, AlreadyYou have to wonder if the American history shared above from Charlie is correct, and those pointing to a recession in 2023 may be wrong.
Before 2022, I was making some minor adjustments to my portfolio to hedge against some dark days ahead as borrowing costs rise to combat rising inflation pending from our Bank of Canada. I was preparing for a recession. So I’m not surprised by 2022 that some experts are calling for a recession in 2023.
Will a recession ever come?
Unless my savings and investment plan says otherwise, I stick to it.
On that note, long-term indexers in 2022 (though I’m not one of them) are a little beat, but on the other hand, as a hoarder of hundreds of stocks, you might be excited for lower stock market returns. Anyway. Good for you.
In fact, unless something drastic changes…equities have outperformed bonds, currency and inflation around the world over the last 120 years…and that should continue. Of course, we don’t have a 120-year investment timeframe, but the lesson is that we can take to heart from such statistics and market history. If investing for the future is like the past, then investing in common stocks should be the path to building wealth over time.
Especially when 2022 was disappointing because you got so many of your shares – cheap!
To review some Detailed 2022 model portfolio returns, look no further than Justin Bender’s site for these details. His record was outstanding.
Turning to some 2023 predictions for where things might be headed in the U.S. stock market, here are some expert opinions on S&P 500 value by the end of the year. Tom Lee is probably not right but then again, we’ll see!
What I thought about…
- While interest rates may rise a bit more, despite peak inflation, has the forward-looking stock market already bottomed out in early 2023?
- Now in 2023, many DIY and institutional investors are already looking ahead Lower inflation with rising interest rates, does this mean that smaller rate hikes in late 2023 and ultimately no interest rate hikes reduce the upside our economy faces as the year progresses? It does Now is the time Want to load more stocks, including some more energy sector stocks?
- It’s been a tough year for growth stocks, just like the tech sector. 2023 Has technology advanced again?
- Elevated inflation and rising interest rates have hit some stock market sectors harder than others — but the momentum still seems to have room to run. Defensive market sectors (with relatively fixed income) such as consumer goods, utilities and health care – have not declined much even from 2022 pricing. Does that mean we’re going to see a weaker economy in 2023 overall?
You know, the economy is not the stock market, but I see relationships between the two. If I were a betting man (I’m not, but I like predictions for fun!) I’d say:
- 2023 may have some old economic growth, but thanks to very low and persistent unemployment rates, not an outright recession.
- High interest rates at the limits that exist now – and will be here for years to come.
- The stock market could have a double-digit year in terms of total returns for 2023 as it looks ahead.
- Energy sector will grow again in 2023.
What moves are you making in 2023? Or, are you on trend with indexed ETFs or individual stocks or a combination of the two?
More weekend reading…
Related to What 2023 Will Prosper and Lessons Learned from 2022, Ben Carlson Shares 5 Lessons from a Bad Investing Year Punch, as always, for me: Save and invest like a pessimist but be optimistic in the long run. From Ben:
“Last year was a good reminder that it’s never fun to deal with a downturn at this time, but if you can zoom in and have a long-term mindset, the gains will eventually outweigh the losses.”
Enjoyed Dale’s recent Sunday readings, It said it wants to ‘stop recession’ by 2023.
Welcome to my Prudent Life blog Putting their TFSA dollars to work.
I enjoyed it The week under review Courtesy of Dividend Hawk, including various dividend increases on some US and Canadian stocks.
The Millennial Revolution offered some clues Get more returns from their portfolio For a couple of early retirees. The main approach they took Fewer bond ETFs, less balanced ETFs And own More equity related ETFs generate meaningful returns.
Source: See link above.
ZPR stands for Not great….Instead I have a great, recent post that highlights some of the stars Canadian, US and international ETFs generate retirement income here.
Check out this Globe & Mail article this week: Why Your Dividend Stocks Could Use Another Look (Paywall). This article isn’t what you think – it’s very positive for dividend stocks for several reasons. From the article:
“The popularity of dividend investing in Canada is well-earned – this segment of the market tends to best protect investors’ capital during a market downturn, while capturing the bulk of an uptrend. Dividend payments are generally taxed at a lower rate than other types of income in Canada. Very skewed towards income, especially compared to the US market.
Of course, many pure coders won’t like that statement but I don’t! 😉
Dividend growth investor Peter Lynch has put together a unique list of quotes. Here are some of my favorites that apply to my commute:
“15. This is one of the keys to successful investing: Focus on companies, not stocks.
“33. If you invest $1,000 in a stock, you can only lose $1,000. But if you are patient you will gain $10,000 or even $50,000 over time.
Last but not the least, a Purple Lifeshares how she lived on a mere drum roll, mixing a life of frugality and luxury…$16,929.93 as a global nomad in 2022. Unbelievable. He used various travel rewards to travel business class throughout the year. Well played.
As always, Check out my deals page for my current partnerships and great discounts Any stock or ETF based newsletters from the investment community.
Have a nice weekend!