Looking Back on 2023: Predictions vs. Results

01/01/2024

Happy New Year!

The S&P 500, one of the most followed U.S. stock market indices, ended 2023 with a positive performance of 24.23%, moving from 3,794.33 to 4,769.83 points throughout the year. Many financial experts thought the U.S. market would perform negatively, stay neutral, or gain less than it did. This is a great reminder that no one can predict the future, and it rarely benefits investors to attempt to time the market. Do not let short-term uncertainty affect your investment strategy.

Predictions from financial experts at the start of last year varied greatly. Here are five quotes from early 2023 that demonstrate how predictions don’t always become reality:

1. “The U.S. will fall into a recession in 2023.” –The Motley Fool (Jan 8, 2023)

2. “Wilson sees the S&P 500 finishing 2023 near 3,900, but predicted a high level of volatility in the market.” – Business Insider referring to Mike Wilson, Morgan Stanley’s Chief US Equity Strategist (Jan 3, 2023)
   *This would be a 2.8% gain, meaning this prediction was off by 21.43%.

3. “The bank also expects the benchmark index to end 2023 at 4,000, but to suffer price swings along the way.” – Business Insider referring to Bank of America (Jan 3, 2023)
   *This would be a 5.4% gain, meaning this prediction was off by 18.83%.

4. “Stoltzfus reiterated his prediction that the S&P 500 would rebound 15% over 2023, reaching 4,400 by the end of the year.” – John Stoltzfuz, Oppenheimer’s Chief Investment Strategist (Jan 3, 2023)
   *This would be a 16% gain, meaning this prediction was off by 8.23%.

5. “Its team likewise sees stocks recovering by the end of 2023, as long as the recession doesn't last beyond several quarters. The S&P 500 should bounce back to 4,500 by the close of the year, according to the bank.” – Business Insider referring to Deutsche Bank (Jan 3, 2023)
   *This would be an 18.6% gain, meaning this prediction was off by 5.63%.

In summary, avoid changing your strategy based on short-term predictions that are rooted in uncertainty or speculation. Please reach out with any questions, as this article is not meant to provide investment advice for your specific situation. You are never charged for meetings or advice.

 Sources

1.       12 Stock Market Predictions for 2023 | The Motley Fool

2.       Stock Market Outlook: Expect a 15% Rebound After Worst Year Since 2008 (businessinsider.com)

3-5. Stock Market Outlook: Why Wall Street Agrees the S&P 500 Will Crash 20% (businessinsider.com)