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What can we expect from Wall Street in 2023?

Montana finance specialist offers advice
New York Stock Exchange
Posted at 4:15 PM, Jan 04, 2023

BILLINGS - The stock market faced a harsh year in 2022 — so what can we expect for 2023?

According to U.S. Bank, U.S. stocks hit a bear market in 2022 — which is defined as a decline of 20% or more.

That, coupled with inflation, has investors making changes to their life plans.

Mark Cain — the founder and owner of Cornerstone Financial Associates — says that he has seen many forced to put life on hold due to losses in the stock market.

“There’s a lot of people that we work with that have had to put paying their house off or retiring early, or planning on retiring with some income streams, getting a part-time job somewhere,” Cain said.

"2008 was the last big hit. I know I worked through a lot with my clients back then. It took people five to six years to recoup some of those losses from ’08. Just like these losses, there’s people I’ve heard of people taking 15-20% hits," Cain continued. "That’s pretty hard on a portfolio because it’s hard to recoup those hits."

Cain said 2022 had mixed impacts on investors and traders.

“I think the stock market last year was pretty much, go up some days, go down some days, it never really went anywhere. Some people made some money, the traders like usual, some lost some money, depending on what they were in and what their advisors told them to do and what they didn’t do, and what they were comfortable with,” Cain said. “I think it was a pretty comparable year to 2008."

And as for 2023, Cain said only time will tell.

“It’s so hard to tell what’s going to happen in America. I think with the current administration and some of the things that are going on in the political world, I think it’s going to be a tough year, but that’s my opinion," Cain said. "But sometimes it creates opportunity too, and you kind of have to look at the whole picture, and stay open-minded."

According to Mike Wilson, a chief U.S. equity strategist and chief investment officer at Morgan Stanley, the collapse in earnings could be similar to what transpired in 2008—but he does not expect company balance sheets to enter a similar freefall and create systemic financial risk in 2023.

Cain believes investors should be mindful of the ebbs and flows of the market but not afraid of what is to come in 2023. He offered a few tips to investors.

“I think one of the big things that I really see after 30 years of being in this business is you really need to balance things out," Cain said. "You need to have some conservative stuff, some aggressive investments, and pay attention to them and understand when to get in and when to get out and really watch your investments."

Cain said at the end of the day, nobody knows what the future holds.

“We don’t know what the future’s bringing," Cain said. “I think one of the things that we really have to pay attention to is not letting fear run us."