Obsidian Market Update 1/6/2023
“Only in darkness can you see the stars.” Dr. Martin Luther King Jr.
Despite generally gloomy reviews, 2022 contained both darkness and stars. The images from the James Webb Space Telescope changed our understanding of the universe while we lost several models of dedication: to country and duty in Queen Elizabeth II, to the craft of comedy in Betty White, to diplomacy in Madeline Albright and Mikhail Gorbachev, and to breaking barriers in Sidney Poitier.
Both the clearer view of the stars and the sad passing of these icons gave us the opportunity to reflect on and be inspired by the power of perseverance and the pursuit of a cause or purpose greater than ourselves.
Consider Ian, a Category 4 Atlantic hurricane that brought destruction to the State of Florida. This natural disaster motivated contributors to donate over $60 million to the non-profit Florida Disaster Fund of and $73.2 million to the American Red Cross.
We’re inspired by the generosity of our clients who, like so many Americans, stepped up to help those in need. The latest report on U.S. charitable giving in 2021 shows that individuals, corporations, bequests and foundations gave approximately $484.85 billion to charities and that individual giving rose by 4.9% over 2020.
And then there’s the S&P 500.
The year 2022 was not kind to the S&P 500. The index was down 19.4%—a drop that the five companies with the worst performing stocks would have been thrilled to experience.
- Generac Holdings (GNRC) -71.4%
- Match Group (MTCH) -68.6%
- Align Technology (ALGN) -67.9%
- SVB Financial Group (SIVB) -66.1%
- Tesla (TSLA) -65.0%
On the other hand five of the best performing stocks https://www.marketwatch.com/story/these-20-stocks-were-the-biggest-winners-of-2022-11672360388 in the index in 2022 were all in the energy sector.
- Occidental Petroleum Corp. +117.3%
- Hess Corp. +91.6%
- Marathon Petroleum Corp. +81.9%
- Exxon Mobil Corp. +80.3%
- Schlumberger Ltd. +78.5%
In any year, it’s helpful to contextualize stock performance. For example, the pinch in 2022 was painful but we should not forget the S&P 500’s positive gains in both 2020 (16.3%) and 2021 (27%). Many of us remember 2008 and are relieved we didn’t experience that year’s annual loss of 38.49%.
In addition to putting gains and losses into perspective, we are firm believers in diversifying financial portfolios to include investing in companies of various sizes, sectors and growth potential and including a mix of financial and real estate investments.
How we can help
Buy tech stocks! Sell stocks that pay no dividends! Move to bonds! Stay away from discretionary products and services! Sit tight and ride out the bear market!
We’re helping our clients cut through the cacophony of conflicting predictions and advice because no one knows what to expect in 2023, not even Jerome H. Powell, Chairman of the Federal Reserve. “I don’t think anyone knows whether we’re going to have a recession or not, and if we do whether it’s going to be a deep one or not. It’s not knowable.”
That said, we are constantly watching, analyzing, and aligning investment strategies and opportunities with your unique goals. We are keeping our eye on all indicators, so you don’t have to. Whether your goal is to achieve financial freedom today or in retirement, through investments or the value and eventual sale of your company, we’re working today and throughout 2023 to give you the peace of mind you deserve.