Written By: Ryan Rinehart

As we approach the conclusion of 2023, I wanted to revisit the blog I shared back in August regarding market downturns and how they often occur, even during years where we see great returns in the market.  In fact, my post highlighted that in the 55 times, the S&P 500 has been up more than 10% since 1928, it also experienced a market drop of 10% or more at some point in 23 of those 55 years. In the 34 times the S&P was up 20% or more since 1928, it experienced a 10% drop at some point in 16 of those years. The overarching message I wanted to make clear was that even when the market is having an incredible year, we will still experience stretches where it is falling.

Back in August when I wrote this post we were in the middle of a rough stretch, and many were feeling very uneasy about the outlook for the rest of the year. So today I wanted to take a closer look at how the market has recovered since the rough patch we saw, as well as a look at the overall performance for 2023 as the year comes to an end.

January Through July:

After a turbulent 2022, the market started 2023 on a positive note. In January we saw growth, with the Nasdaq rising by 9.68% and the S&P by 5.8%. Although February saw a minor dip after this promising start, March marked the start of a five-month streak of positive returns, culminating in July. By the close of July, the Nasdaq had surged by 37%, and the S&P was up nearly 20%.

August Through October:

In August we saw momentum take a hit as both the S&P and Nasdaq were red for the month, but it was September where we saw the most significant setback with the Nasdaq falling 6.4%, and the S&P down 5.35%. The slide continued in October, concluding a three-month period where the Nasdaq experienced a 10% dip, closely followed by the S&P at -8.37%.

November:

After the rough three-month stretch, there were a lot of investors who were stressed the slide would continue to end out the year, and we’d see all the early gains wiped away.  However, in November we saw the complete opposite. As I write this on November 30^th the Nasdaq has risen by 8.31% during the month, accompanied by a 7.20% increase for the S&P. With one month remaining in the year, the stock market appears likely to conclude 2023 with impressive returns. After all the ups and downs laid out above, year-to-date we’ve seen a 35% surge for the Nasdaq and an 18.25% uptick for the S&P.

The reason I wanted to write this update today is because what happened in 2023 is a prime example of what I outlined in my original post back in August. Overall, it’s been a fantastic year for growth but like many of the years I referenced in the first paragraph of this post, we’ve still had to navigate challenging stretches. It’s a great reminder to always try your best to stick to the long-term plan, even during stressful moments. The key is having a well-designed investment strategy that has the right amount of safety built in so that you can tolerate market volatility.

Dad Joke Of the Week:

Question: Where do penguins keep their money?

Answer:  In a snow bank.

Say What? 

Chatbots are starting to change the way we seek information. But unfortunately, sometimes they just aren’t quite accurate. A tech startup recently concluded that chatbots fabricate answers, or “hallucinate” more frequently than many people realize.

In one recent AI fail, a lawyer who used a chatbot to write a legal brief later asked a judge for leniency after it was discovered the chatbot cited at least six cases that didn’t even exist.

This week in history

1941 – President Franklin D. Roosevelt signs a bill officially establishing the fourth Thursday in November as Thanksgiving Day.

1955 (Dec. 1) – Rosa Parks set off a bus boycott in Montgomery, Alabama, when she would not give up her bus seat for a white passenger. This is often thought of as the event that started the Civil Rights Movement nationwide.

1963 (Nov. 22) – President John F. Kennedy was assassinated in Dallas 60 years ago this November.

1967 – The first successful human heart transplant took place in Cape Town, South Africa.

2001 (Dec. 2) – Houston-based energy trading company Enron files for bankruptcy.

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