Broker Check
4th Quarter 2022 Review

4th Quarter 2022 Review

January 04, 2023


4th Quarter 2022 Review                                                                                                   January 4, 2023


Dear Awesome Clients and Friends,

Happy New Year 2023!

As we welcome the New Year, I personally extend to you and your family wishes for health, wealth, and blessings in this new year. May 2023 be an extraordinary year that brings new aspirations, friendships, and most of all, peace.

2022 - Goodbye and Good Riddance!

Many of us are celebrating the end of 2022. Soaring inflation and aggressive rate hikes from the Federal reserve caused both stocks and bonds to plummet. All three of the major averages suffered their worst year since 2008. The S&P fell over 20% from its record high and at the same time bonds experienced their worst year in history! There was literally nowhere to hide in 2022- except cash. After ten great years following the Great Recession of 2008, most investors were taken off guard to declining stocks and bonds. Many investors (including young advisors) have not seen a bear market like the one in 2022! But that is how markets work ... they adjust and have historically recovered higher.

Since 1928, the S&P 500 has experienced 21 bear markets (not including the current downturn). That's approximately one every 4.5 years, on average. The average length of a bear market is 388 days. Excluding the outlier bear markets, the average length is around 330 days -- or just under one year. We don’t know if we are in a “typical” bear market, however what we do know is that they do not last forever.


The Good News about Inflation and Rising Rates in 2023

Starting in January, Social Security beneficiaries will see an 8.7% increase to help offset inflation. Rates for savers are better than they have been in years. During the height of the pandemic, the interest you could earn on money held in a savings account was next to nothing. But in a world of high interest rates, savings accounts can earn much more considerable returns. Currently, the best money markets savings accounts, including the Schwab Money Market fund offered by TD Ameritrade, are yielding over 4%.

According to a study by Morningstar, the outlook is improving for stocks and bonds next year. The percentage of a nest egg that retirees can safely start withdrawing from savings has increased to 3.8%, up from 3.3% in 2021. That may seem strange with inflation still high, recession fears growing, and many portfolios down double-digits this year. But with the market battered, there are better odds that future asset returns will improve, feeding into the rationale for a higher withdrawal rate.


Important Tips and Reminders for Financial Planning in 2023

Now is a great time to focus on planning for 2023. If your cash needs are known early, plan to raise the cash and set that amount aside in a higher yielding money market. Think about your Required Minimum Distributions (RMDs). Don’t wait until the end of the year to take it. Consider a Qualified Charitable Donation (QCD), a donation right from your IRA that can lower your taxable income. Does a ROTH conversion make sense? Trust your financial plan. It is important to remember that we can’t predict the markets- but having a plan and reasonable goals no matter what stage in your financial life will help you keep confident and on track. Let us know how we can help.

Have Faith and Peace

A New Year is on the horizon. Each day that comes presents something new and exciting both for you and the people in your life. Is this the year you open the door to something new and exciting? Embark on some new travel adventure? Or does the year-to-come mark some other important moment in your life, like a special birthday or anniversary?

Whatever it may be, I wish you a happy new year. I hope you have a wonderful 2023 filled with new possibilities and opportunities, good times, and Peace.

It is my singular focus to provide the advice, performance, and personalized service you can depend on to build financial security.  It is my honor and privilege to serve you and your family, and we look forward to seeing you soon!






James T. Elios, MBA, CHFC®, CLU®, AIF®,

President and CEO