S&P 500’s Start to 2023 and What It Means for You

Graphic with the question about how bad the next 3 decades could be. Includes graph about money, time, and plans.

It has been a little bit easier to be an investor to begin 2023 than in 2022.

2023 began with the S&P 500 at 3,824.  As I am writing this note to you today, the S&P 500 stands at 4,128 (almost 8% higher). Happy Valentine’s Day!

In case you are wondering, the all-time high for the S&P 500 stands at 4,796.56.

The S&P 500 would need to increase by an additional 16.2% to reach the previous high.

We want to remind you of the importance of having a long-term perspective when it comes to investing.

Since 1926, the S&P 500 has averaged approximately 10% per year.

However, the market rarely earns around 10% in a given year.

In fact, in just 7 of the past 97 years, the S&P 500 earned between +8% and +12% per year.

The S&P 500 has been up as much as 54% in a calendar year and has been as low as -43%.

We want to share a fact with you that astounded us, and we hope it gives you hope.

When reviewing rolling 30-year periods of S&P 500 performance, the worst the S&P 500 has performed is +7.8% per year.

This means an approximate 850% total return over a thirty-year period.

Where To Put Your Money

1/ We would suggest not having all of your money in the stock market.  The returns are too random from year to year.

2/ When the stock market is down, you need a place to go to access money.  This could be an FDIC-insured checking or savings account.  FDIC-insured short-term CDs.  It could also mean having high-quality investment-grade bonds with short-to-intermediate term maturities.  We do not sell stocks into weakness.

3/ Forget about timing the market.  The best time to invest is when you have the funds to invest.  Get invested.  Stay invested.  The rest is commentary.  Build your plan around the historical three-decade worst-case scenario of the stock market returning 7.8% annually.

If any of your friends or family have financial questions, we are happy to be a sounding board for them.  If they are important to you, they are important to us.

–Nic & Jeff

We are a full-service financial advisory company that allows you to make a one-page plan for your money and prepare for your future. Learn more about what we do and how we can help you here


* You cannot invest directly in the S&P 500.

* Past performance is not indicative of future results.

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