First the bad news (all figures as of 12/31/2022):
• S&P 500: -19.44%
• International Stocks (MSCI ex US): -16.15%
• Nasdaq Composite: -33.10%
• Barclays Aggregate Bond Index: -13.01%
Now the good news IF you are my client:
• A diversified 95% equity portfolio overweighted to small and value stocks both in the US and across the world was down roughly 10%. Not every client is in the same portfolio, these are general numbers.
• The guaranteed portion of the cash value of your whole life insurance portfolios went UP in 2022 and WILL go up again in 2023, the only question is by how much.
2022 was a challenging year. I don’t think I need to go through all the bad economic news and the difficulties our country dealt with this past year. 2023 looks like it may begin the way it ended. But that does nothing to change the direction we are heading with helping to build of client balance sheets.
While it’s true that everyone has a unique situation and there is no one size fits all approach, here are some things that are true for just about any client I work with and the things that will help with anything 2023 throws at us all:
1) We protect first. Property, liability, health, life and income protection are the first things we take care of, and we continue to monitor those policies as the years go along.
2) We promote a high savings rate. For most this is a minimum of 20%.
3) We promote the elimination of all short-term debt, and we will aggressively look at reducing long term debt as interest rates continue to rise.
4) We use a balanced approach that keeps money in different tax environments as well as employ not just risk-based assets, but also the use of guaranteed assets like life insurance and annuities.
5) We significantly diversify our investment portfolios. This doesn’t mean we will always “beat the market” but it does mean we can help smooth out the ups and downs of portfolios.
The “bad news” numbers at the top are really not fun at all to look at. These are the numbers that I would say many of your friends and relatives may be dealing with. For you, you may think these numbers apply to you as well because that’s what the media is telling you. But that may not be the case.
For 25 years I’ve put myself in opposition of “what everyone else does”. In fact, many times as I’ve advised people on what they should do I’ve heard the question, “why doesn’t everyone do this”? Or, “why haven’t I heard of this before”? I can’t answer either of those questions. I wish I could, but I really can’t. What I CAN tell you is how I do it and how I will continue to do it.
2022 hurt many people. It might even have caused some people to change dreams or goals they had. Odds are….you aren’t one of them.
Here’s to a great 2023. If markets soar we will all be happy! If they don’t we will rebalance and we will continue to take refuge in our tax advantaged and guaranteed assets and we will continue to build those balance sheets until the goals are met.
Happy New Year and, as always, thank you for allowing me to “Worry for You”!
Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 5280 CARROLL CANYON ROAD, SUITE 300, SAN DIEGO CA, 92121, 619-6846400. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. WESTPAC WEALTH PARTNERS LLC is not an affiliate or subsidiary of PAS or Guardian. Insurance products offered through WestPac Wealth Partners and Insurance Services, LLC, a DBA of WestPac Wealth Partners, LLC. CA Insurance License Number - 0D34103 | Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. | 2023-148665 Exp. 01/25
Data and rates used were indicative of market conditions as of the date shown. Opinions, estimates, forecasts and statements of financial market trends are based on current market conditions and are subject to change without notice. References to specific securities, asset classes and financial markets are for illustrative purposes only and do not constitute a solicitation, offer, or recommendation to purchase or sell a security. Past performance is not a guarantee of future results. Indices are unmanaged and one cannot invest directly in an index.