We say kiss goodbye to 2022 and one of the worst markets since 2008. What will 2023 bring? Where do you place your money in 2023? Here is a brief weekly overview of the markets, what’s going on and some things to think about heading into the new year.

If you're looking for a trusted source to help you stay on top of the ever-changing financial world of investing, retirement and estate planning, and asset protection, whether it's for you and your family or your small business, you're in the right place. This is the 1715 Treasure Coast Financial Wellness Podcast, where we'll keep you up to speed with the latest market news and conditions every week. Now here's your host, Thomas Davies. Hello, and welcome to another 2023 edition of the 1715 Financial Wellness Podcast.

My name is Thomas Davies. I'm a wealth advisor here in Stewart, Florida, and welcome to my show. Wow. 2022.

Woo. Thank God it's gone. It was something to just to shake your head about, to sum it up in a few words, it sucked. As far as the market's concerned, and among other things, it was really an interesting year as far as more of an anomaly where not just the equity markets went down, but also the bond markets went down.

So there was no place to hide. The market, and when I say market, for those of you that are new to investing, I'm talking about the S&P 500, and that ended down almost a little over 20%, which is bear market territory. So when you hear professionals like myself talk about the market, just know that generally we're referencing the S&P 500. But man, what a year.

What a tough year it was. I'm glad that it's over. Looking towards 2023, and the outlook that most economists and analysts are looking at, what do I foresee, and where are we going to go from here? We went pretty much straight down from January of 2022 all the way down to 20%, even a little bit more than that.

I think at the peak we were down 27%, almost 30% in the market. And we bounced back here in the fourth quarter to pick up a little bit, but still ended up down for the year. How did your portfolio do? I can tell you that the 60-40 portfolio was absolutely hammered.

If you were in 60% equities and 40% bonds, you were down 15% to 20%. It does not feel good. No one likes to lose. We gave up basically a year's worth of gains from 2021, and actually some into 2020.

So that doesn't feel good at all, but I can tell you as a long-term investor that one year certainly does not make a market, and that generally we look at the investment to be a three- to five-year investment. So history tells us that generally when you have a down market like that, a lot of times you'll have a nice bounce-back year. That may not be the case, as most analysts are talking about a sideways market, meaning not really a couple percentage to the upside, or maybe a couple percentage to the downside. But I think most concur that we won't see double-digit losses in the market this year.

Now with that being said, January of 2022 and February 2022, most analysts could not foresee a 20% decline in the market. No one was calling for that, although we were generally overdue for a correction in the market, which was 10% to 15%, which we certainly got, but we got a little bit more. So what do you do in your portfolio? Maybe you are down 20%, 30%.

I know some people that are down 40%, 50%, and they're saying, wow, what can I do? The last thing you want to do is give up good equities that you're in that maybe some of the babies got thrown out with the bathwater, to use a term that gets thrown around a lot. You really want to dive in and do some research and see what those companies, what their balance sheets look like. Have a portfolio review.

You can call myself or another financial professional and get a second opinion. Just because you go to one financial advisor doesn't mean that another advisor may not have great ideas or something different than what you're hearing. You certainly want to take a look at that portfolio, and if you're a long-term investor and you have a timeline of three to five years, then you're probably going to want to hold on to those investments. The theme right now in the short term is dividends.

I've always liked dividend paying stocks. Certainly coming out of 2013 and 08, 09, and really the outlook, of course, was doom and gloom, and nobody really kind of knew what the market was going to do, and it reminds me of that. They're saying it's going to trade sideways. Well, I looked at equities that would pay me 2%, 3%, 4%, 5%, upwards maybe a 6% or 7%.

There's some stocks out there that certainly are paying 6% and 7%. Some of you go, well, maybe I don't like stocks and it really gave me a bad taste and I don't want to be there. Well, you can certainly look at the 10-year treasury or even some CDs. Last I looked the other day that you have one-year CDs that are paying anywhere from 4.5% to 4.75% a year.

Now that's certainly not outpacing inflation, which was around 7%, so you're still losing 3% to inflation, but it's certainly a safe alternative if you don't want to participate in the market. Now, with that being said, inflation certainly was the main story last year, which I really think the underlying story, which was the main story, was the war in Russia and what's going on with Vladimir Putin and Ukraine. That war is certainly still raging on, although the other day Vladimir Putin wanted to have a ceasefire. Who knows?

Maybe hopefully that war can come to an end and they can come to some sort of agreement. I do believe if that happens, you're going to see the market take off because I think that's the overhead elephant in the room with someone who's got their hand on that nuclear button, which is scary for the world. So the other news, of course, is inflation. The Fed has been hiking rates.

They've been going up, up, and up. That is not necessarily a bad thing, although it has caused the market to decline. It also has helped the bond market, and as I just mentioned, you have one-year CDs paying over 4%, so as these rates go up, there's going to be more opportunity in some of those safe investments. Now, CDs are generally backed by the FDIC, and that is up to $250,000 per CD and per institution.

So maybe if you have more than $250,000, you maybe want to park some of that money in different banks to get those CDs. So you put $250,000 in one, $250,000 in another, and that way your money is all covered under the FDIC insurance at different banks. So that's a couple of the news bits here going into 2023. You know, I don't want to beat 2022 up too much.

It was just bad, bad, bad. Unfortunately, a lot of deaths last year. Man, we lost a lot of celebrities, a lot of really good people last year. As a lot of you know or don't know, I'm a big hockey fan.

We lost a bunch of hockey players, Guy Lafleur, Mike Bossy, Clark Gillies, Jean Potvin, just you know, a slew of great hockey players, among a lot of other people, which it's just, you know, unfortunately, it's a part of life, and you know, we go forward. So I have talked about estate planning. It will be really interesting to see some of those celebrities and their estate plans. You know, we here in South Florida look at the Huizinga and legacy for also the stadium that was built for the Miami Dolphins and the legacy there, and then just one of the worst estate plans ever, you know, just going forward.

So Google that one if you want. But if there's any case for an estate plan, that was certainly it. So going forward, you know, this year we're going to talk about estate planning, things you can do maybe in your IRA, you know, with taxes certainly have gone up. You know, does a Roth conversion still make sense?

It's really just calculating those numbers. Taxes, I mentioned that we're going to have a CPA on the show. Unfortunately, towards the end of the year, he got really busy, but he will be on the show coming up in the next few weeks. We've got some other great guests coming up on different subjects.

Hopefully you'll like some of the guests that we had that talked about Medicaid and Medicare, health insurance, you know, in-home care insurance with Jonathan White. You know, those are some really vital things, especially for the younger listeners out there that are in your 30s and 40s. You really want to look now into some long-term care planning. I can tell you when I started in this business in 1996, there was probably 16 to 20 carriers that offered long-term care insurance.

And now we're down to about four, maybe five carriers that offer that long-term care insurance. It's expensive and it's definitely something if you don't have it, it's really cheap to get in your 30s and 40s. And the numbers of people that use it, it's like three out of seven people end up needing that long-term care. It's one of those things.

You should have it. If you have the funding, go out and get it. Call myself to get a quote. And it's really, once again, if you're under 50 years old, it's fairly cheap.

I will talk about life insurance a little bit. Sometimes people say, you know, how can I protect myself with life insurance? Sure. Life insurance is not for you.

It is for your loved ones. You're buying it for the people that you will leave behind. So maybe you're head of household, you're the breadwinner in the family, and you want to make sure that your mortgage is paid for. Well, if your mortgage is two, three, four, $500,000, then you better have a policy for that amount.

That way you're ensuring that your family is taken care of, that they will have a place to stay that will pay for that mortgage. Now, also, too, you want to figure in taxes and things like that, and bills. So maybe a million-dollar policy, if you have a $500,000 mortgage, then a million-dollar policy may be something that you look at. I can certainly get you quotes for that also for all your life insurance needs.

So that's life insurance and long-term care. Once again, it's all part of that financial planning that you have to have just to have a sound plan. I don't think anybody wants to end up on Medicaid in a shelter. Especially here in South Florida, we see the homeless all the time.

And unfortunately, a lot of them are just bad decisions that were made along the way. It's just what it is. You know, to also go on another topic, unemployment numbers, or I should say employment numbers came out this week a little better than expected. It tanked the market the other day.

We've had a great rally today here on Friday, with the market being up probably 2.5% through almost 3%, which hopefully we're going to end up the new week here a little bit up. Here in South Florida, and I mentioned that, we have listeners all over the country and all over the world for that matter, there's still a lot of jobs in South Florida and in Florida in general. I work with a lot of employers that still are looking to hire. And it's just the people aren't there.

So it's interesting. The Fed is out there fighting inflation, and they say that the unemployment numbers have to go up. Well, here in Florida, we're underemployed. And I can tell you, like I said, talking to many, many different employers, they're looking for quality employees.

Now also too, here in Florida, just like across the country, but more so in Florida, property values have gone through the roof. In the last five years, if you own a home, then you probably know that your home values doubled in the last five years. So that $300,000, $400,000, $500,000 home is now worth double what it was when you paid for it or what it was valued at five years ago. You know, a one bedroom in Palm Beach for rent is about $2,100.

And not so long ago, the city of Miami was rated the most unaffordable place to live in the country. And people are still moving here every day. Like I said, it's very, very underemployed here. So if you're listening and you're looking for a job, certainly look at Florida because there's a lot of job openings.

But the problem is that you're going to pay a lot more either in a mortgage, as interest rates have gone up, and also rents are expensive. So that's, you know, a couple things to consider. But all things considered, you know, we love this state, love where we live. The weather is generally pretty good, other than the summer months, it's hot.

But I can tell you my friends in the Northeast that are in the 20s and 30s or in the Midwest, no thanks. It's good for about a week to go snow skiing, and I'll come back to the sunny beaches. So I hope everyone had a wonderful holidays. Time to reflect maybe a little on 2022.

Personally, you know, it was a tough year with the market being down. You know, it's really the time that most advisors have to do a lot of work. You know, it's not about making excuses, but it's about having those solid plans in place, reviewing the accounts, you know, on a daily basis, going in and seeing what's going on as the markets were fluctuating. Lots of volatility.

Boy, did we have volatility last year. I think I did two or three podcasts last year just on volatility. You know, down 700, down 1,000, up 1,000, down 700, down another 800, up 1,000. Are we going to see some of that volatility again this year?

Yeah, I believe so. We're going to have some days. So for some of you day traders and short-term traders out there, I think you're going to get some opportunities this year to have those volatility days. Great example is today, this week, that volatility theme continued.

So with that, once again, I hope everyone had a great holiday last couple of weeks. I do apologize for not having the podcast up and running. I got a cold, just like a lot of people had been sick in the last three or four weeks, and I lost my voice. So you can't do a podcast when you lose your voice.

And it's great to be feeling better again. Really looking forward to 2023. Keeping the eye on the markets, ear on the ground, thumb on the pulse, and keeping you guys informed of what's going on in the markets. Looking forward to February, headed to an ETF conference in Miami Beach, where all the fund managers will be.

I was there last year. It was very interesting to hear a lot of the fund managers, like Kathy Wood, Michael Saylor with Bitcoin. They're all talking Bitcoin to a million dollars by 2030. Does that still happen?

At the time, Bitcoin was $60,000 a coin, and we've certainly come down a long way from that. So I'd love to hear everybody's thoughts on some of the cryptocurrency. What your thoughts are. I have my thoughts.

I think it trades sideways along with the market. It's got a long way to go. We really started picking up some news in the regulation department of being regulated. I think with the markets cooling off, that has also cooled off.

There's now Bitcoins around $16,000 a coin, something like that. It's an interesting subject. I don't deal with it a lot, so I would be interested to hear the listeners' thoughts on the cryptocurrencies. Real estate, I'll talk about it real quick.

Here in Florida, it's come down a little bit. We're seeing a little bit more inventory coming to the market, so there is some opportunity. But as quick as those properties, if they're listed right, they're going right out the door. Once again, people are still moving to Florida and being underemployed.

I don't see that changing over the next few years. Is recession this year? To be fair, they've been saying recession for the last five years. Was it 2022, 21?

Certainly 2020 with COVID and the dive in the markets. They all talked about recession in 21 and 22. 22 really might have been the recession. It certainly was in the market, and if you were invested, you felt it.

So maybe we have already had that hard bounce in that recession in 2022, and 2023 is a bounce. You know, the economists, they don't know, so the idea is that you have a good, sound investment plan. You can certainly make some choices based on some themes of what's going on in the markets. I think that tried and true investment planning, asset allocation, I still believe in modern portfolio theory.

For those of you that are not familiar with that, I suggest looking it up. Modern portfolio theory, and it's something that I believe in, and I think that just good asset allocation, using your head, you know, a little bit of common sense that goes a long way in investing, and when you have that down market, it depends on where you are. If you're aggressive, then you're going to go down with the market, and if you're conservative, then you shouldn't be going down with the market. It all depends on where you are and the risk tolerance in your portfolios should be matched to that risk tolerance.

I know there's a lot of people out there, some of you that may be listening that didn't expect your portfolios to go down 20, 30, even 40, and I know a couple people, unfortunately, that are down 50, 60% last year. Was that your risk tolerance? Did your advisor say, hey, your account may go down 30, 40, 50%? That may be possible.

If you're 60, 70, 80 years old, then you probably shouldn't be going down 40, 50, 60%. Most bond funds were down 10, maybe 15% if they're a little aggressive, and as you're in retirement or at retirement, you still should have that fixed income in your portfolio, more of a 70, 30, 70% bonds, 30% equities, being less aggressive. Those of you that are in the target date funds, did they work for you? I'm very curious.

I haven't researched them yet. I'll be curious to see how the target date funds that are in a lot of people's 401ks, and a little update here, I'll talk about that real quick. I can help you with your 401k, even if it's managed by someone else. That means if you have a corporate 401k, I can certainly help you with that and help you make selections inside those portfolios.

Give me a call, and we can figure that out for you, and we can help you with that 401k selection. I know a lot of you don't even know who your financial advisor is, but believe it or not, you have one attached to that 401k portfolio. If you don't know who that is, and you can't reach them, and you need help, give me a call. I can certainly help you with that.

I have a brand new program that allows me to see the 401k and help make decisions inside that 401k with you and work with you as a team. So I'm going to wrap it up today. Thank you again for listening. We'll have a little bit more information each week.

Try to get these podcasts about 20 to 30 minutes. Not sure how I'm doing on time here today, but once again, I hope you find it helpful and insightful. And thank you for listening, and we'll talk to you next week, and I am out. Thank you for listening to the 1715 Treasure Coast Financial Wellness Podcast.

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Have a great day, and we'll talk to you next week.