As the New Year Rolls In, So Do the Prognosticators

It probably happens every year, but I cannot recall a time when so many pundits had so many opinions on how the market will perform in 2023. The funniest headline about the market’s near-term future was JP Morgan’s, “The End of the Affair.” It probably was written to catch attention, and in my opinion would have been more appropriate a year ago, referring to the bull market prior to last year’s downturn.

Many of the headlines about the new year are positive and include such language as:

• “Three Scenarios that Could Surprise Markets (on the upside) in 2023”
• “Is a Stock Rebound in the Cards?”
• “Inflation will Crash Much Faster than Expected”
• “Comeback for Fixed Income”
• “Economy will Avert Deep Recession”
• “Fed Pivot Could Push Stocks Up by End of Year”
• “Second Half of Year will be Up, Up and Away”
• “S&P will Soar at Least 20%, Nasdaq at Least 30%”
• “Fed will Pause Rate Hikes Sooner than Everyone Thinks”
• “The Stock Market will have an Excellent Year”

But there also are naysayers:

• “Wall Street, Meet Mud”
• “A Strange Day is Coming to America”
• “More rate hikes are coming”
• “Stocks will continue their lows in 2023”
• “Continued Volatility Ahead”
• “Markets May Continue to Face Choppiness”
• “Challenges Abound for Dow”
• “A Stock Market Crash in 2023”
• “Millionaires Predict the Market Will Get Much Worse”

With so many divergent views, what’s an investor or issuer to think, or more importantly, to do? Who should be believed?

I just counted the number of bullet points above, and there was one more positive than negative. A good sign, although I am not an analyst and my research was cursory at best. However, the sources are good and professional.

If you really want a forecast for 2023, you could always flip a coin.

Friederike Fabritius and Hans Hagemann wrote in in their book, The Leading Brain: Neuroscience Hacks to Work Smarter, Better, and Happier, that if you’re satisfied or relieved by a decision the coin made for you, then go with it. On the other hand, if the coin toss leaves you uneasy, then go with the other choice instead. “Your ‘gut feeling’ alerted you to the right choice,” they wrote.

So please, flip a coin if you will, but at least think positive thoughts. Good luck, and have a healthy, happy and prosperous new year.

Roger Pondel, rpondel@pondel.com