“An eight-person table stiffed me, so I only made $5 in tips.” Our son is a server at a diner-style restaurant. On a recent night, he only had two tables during his shift and only made five dollars in tips. “Dad, I worked really hard for them, and they even told me how great of a job I was doing, but they still didn’t tip.” Sometimes people don’t reward their server even though they should, and sometimes months in the Stock Market don’t reward us either, but thankfully January rewarded us well.
January is behind us now, and it felt different than 2022. In 2022, stocks and bonds fell, and there was a lot of uncertainty. But this past month, stocks and bonds were both higher and among the highest monthly returns since 1980. January tipped.
The S&P 500 was up in January 6.3% making it the third time in four months it was up more than 5%. It’s still a new year, but I like how the year is lining up. We will probably have a short and mild recession, but I think the US economy will pull out of it quickly because of strong consumers who still have a lot of cash to spend.
I am still overweighting my strategies to stocks but am changing the makeup of the stocks because I think this year will end strong once we are past this mild recession in the near term.
I had been leaning more toward low-volatility US stocks than international stocks, but I’m moving back toward my target levels. My rationale is that developed international stocks have rebounded and have good valuations. I’m doing this because I see some opportunities for my clients, but I also expect these moves to manage their risk level.
After a challenging 2022, January is encouraging. I’m sure 2023 will have some market ups and downs, but after last year, it’s good to start the year strong. January tipped, and I think 2023 will too.
One last thing, if a teenager or college kid serves you at a restaurant, don’t be a knucklehead and stiff them. Instead, be a generous tipper and encourage hard work; I’m talking to you and the market.
Have a blessed week!
Opinions voiced above are for general information only & not intended as specific advice or recommendations for any person. All performance cited is historical & is no guarantee of future results. All indices are unmanaged & can’t be invested in directly.
The economic forecast outlined in this material may not develop as predicted & there can be no guarantee that strategies promoted will be successful.