The Stock Market and the Economy are not one and the same. The Stock Market is a Leading Indicator of the Economy. What that means is stocks go down in anticipation of a recession and rise in anticipation of a recovery. Now, let's look at 2022. Inflation hit a four-decade high. According to the IMF (International Monetary Fund), the global economy had its worse year since 2001.1 Many stocks had the worst year they have had in decades, and some had the worst year ever. Bonds and Treasuries did not fair so well either. Disney had its worse year since 1974.2 And Tesla had its worse year ever.3 Stocks are cheaper now than they were last year. And while I do not have a crystal ball, many forecasts say they will be higher at the end of the year. That would be great. But does one year truly matter to you? It should not. We should care about ten years from now. And then ten more years. No matter what your age, you want your portfolio to last ten more years; for you, your family, and your legacy.
I encourage you to not get so focused on the noise in today's news. You must not invest in the future looking behind you (at what the markets did in 2022).
1.Bloomberg.com December 26, 2022
2 wsj.com December 29, 2022
3 Bloomberg.com December 31, 2022