In this First Half Market Review, we delve into the surprising performance of the market in 2023. Despite initial concerns and dire predictions, the S&P 500 Index has defied expectations, surging over 14% year to date. Coming into the year, there was talk of recession and mass layoffs, but the market proved resilient. Discover the insights and investment lessons from the first half of the year, and understand why having a solid investment plan, is essential for success in these unpredictable times.

Coming into the year we were inundated with predictions of recession and mass layoffs. Remember all the talk about Google, Facebook, Microsoft, and Amazon layoffs?

Higher yields and increased economic uncertainty caused money managers to believe stocks were unattractive and declare 2023 “The year of the bond.”¹ Barron’s reported that market experts were expecting a selloff in the first half of the year.²

Over the last six months we experienced a few bank failures and predictions that things were going to get worse. The market sold off swiftly, but briefly.

So How Did We Do?

Despite all the concerns, bank failures, and dire predictions, the S&P 500 Index is up over 14% year to date.³

And now the tune has changed! Barron’s went from headlining “Be Ready For a Drop” at the beginning of the year to, “This Market Has Legs.” Does it have legs? Will it keep going? Who knows.

What We Know

What we know is that historically the market goes up much more often than it goes down. In fact, since 1928 the market has gone up more than 20% in a year more often that it has experienced a calendar year loss (of any degree).⁴

We also know that trying to guess when to get in and out of stocks can have very costly consequences. Missing just a few market rallies can drastically impact your performance. Just think the COVID rally of 2020 and the unexpected positive returns we have had so far this year.

So, what do we learn from the first half of 2023? We learn that market experts were once again wrong. We learn that surprises happen – it is impossible to know what will happen nor how the market will respond.

And that is why the best investment advice is to have your plan guide your decisions.

If you’re considering working with us here at Mosaic, we invite you to learn more about who we serve and how we help them. You can also contact us with any questions you have.

By Anthony C. Williams, CWS, ChFC, MRFC, CLU | Investment Advisor Representative | President & Founding Partner of Mosaic Financial Associates & Orthopaedist Advisory Group | Securities and advisory services offered through Cetera Advisors LLC, Member FINRA/SIPC, a broker/dealer and a Registered Investment Advisor.  Cetera is under separate ownership from any other named entity.

© The Behavioral Finance Network

1. BusinessWeek, Jan 11, 2023
2. Barron’s, Dec 19, 2022
3. Total Return through Jun 27, 2023
4. Ben Carlson, Wealth of Common Sense, June 24, 2023

Photo by Walter Walraven on Unsplash