New Year's Eve | January 3 Weekly Excerpt

End of the year, a time to reflect on the 12 months of 2022.

It can be said that in a way we were in a bubble due to the influx of new funds that entered the market during the pandemic and burst in 2022. Now, going into this new year 2023, which investors hope will bring greater fortunes, and for good reason, this past year has been quite inconsistent.

Macroeconomic uncertainty, geopolitical instability and a hawkish Fed led the S&P 500 to lose 19,44% on the year.

The best performing sector has been the energy sector, which grew by just over 60% during 2022. Therefore, investing in this sector would not only have offset the massive losses recorded in other areas, but not considering it would automatically lead a portfolio to negative returns for the year.

Even after bouncing off their October lows, stocks fell sharply in 2022 and market analysts expect more of the same in 2023, at least initially. With the Federal Reserve poised to continue raising interest rates, investors are sitting on a great deal of uncertainty, and this could add to volatility in 2023. While the market as a whole may fall again in 2023, some sectors are lacking in this trend. Higher rates have hurt growth stocks, but many value stocks have performed well.

Just like the US dollar, the forex and crypto sector were also hit this 2022. Many of these currencies suffer from volatility, but volatility is not always a bad thing, it can also be instructive. It can teach investors about the ecosystem of the cryptocurrency and currency markets, showing what is possible and what is not.