2023 Market Review and Outlook







Markets came to a stellar end in 2023, sidestepping the burden of inflation and interest rates to post strong returns for the 12 months to 31 December 2023.  This article reinforces the lesson that you are better to plan for what might happen rather than trying to predict what will.


At the beginning of 2023, most economists’ consensus was a looming recession which would put downward pressure on share markets.  Twelve months later the reality is quite the opposite. Most equity markets hit all-time highs at the end of 2023, the S&P 500 gained over 26% for the year, significantly exceeding most predictions, the MSCI All Country World Index rose over 22% even as geopolitical tensions increased, and the ASX 200 returned over 12%.


It was a year that defied expectations by many accounts. A number of forecasts predicted that the US economy would enter a recession in 2023 as the Federal Reserve raised interest rates to fight high inflation. But the economy remained resilient, inflation eased, and the Fed declined to lift rates later in the year. Many economists who called for a recession have since walked back their predictions. This underscored that guessing where markets may be headed is not a reliable way to invest.


Unfortunately, many potential investors missed out on these excellent returns because they were trying to time their entry into investment markets, often out of fear of losing money. Others hoped to make money by picking the bottom. If they got their timing wrong and invested in November or December, they picked the market top.


What’s in store for 2024?

Economic resilience in the US and elsewhere is helping boost the global outlook for 2024, but as investors learned last year, the only thing certain is that there will be plenty of uncertainties. Many variables are in play for markets this year, from wars in Ukraine and the Middle East to questions around interest rates. Investors are also likely to be closely following the upcoming presidential election in the US. But it’s worth noting that the political party that wins the White House is just one of many factors investors consider when pricing assets, and sharemarkets have generally trended upward regardless of which party holds the presidency. This may be reassuring when one considers the difficulty, or perhaps futility, of trying to guess what is going to happen in 2024—or any year.


So, as we look ahead of 2024, be prepared for a barrage of forecasts in the coming months telling us what will happen to the economy, growth, inflation, unemployment and what all that will mean for interest rates, shares, bonds, currencies and commodities.


To be fair, these views are often interesting and entertaining to read. It’s quite valid that people have different opinions on where markets might head. That’s what makes a market, after all. But it’s not really the basis of an investment strategy, as we’ve seen. What are sold as forecasts are really just assumptions. They can be based on many different variables. If any one of those variables changes – say oil prices jump over $US100 a barrel – a lot of other pieces of the puzzle can come unstuck very quickly.


If you can’t predict the news or prices, what can you do? We know that the average return in the equities market over the past century or so has been around 10%. It’s not like that every year, of course. There’ll be good years and there’ll be bad years.


But those returns are available to disciplined and diversified long-term investors who count on the ability of human ingenuity in many areas of life to solve big challenges – like the energy transition or biomedical breakthroughs or sustainable food production. Being a long-term investor gives your opportunity to share in the wealth created by those innovations.


The moral of the story? It’s hard to invest and stay invested during volatile times, but disciplined investors tend to be well rewarded by acknowledging there will always be uncertainty. We can’t predict what will happen, but we can build life-long financial plans that are able to deal with what might happen.


Last year was a vivid example of why such advice makes sense.



We are here to help

Calibre Private Wealth Advisers provides financial leadership and peace of mind for successful professionals, business owners and their families.

We engage our clients in real conversations around their life and then help them use the money they have to get the best Return on Life

If you have any questions/thoughts in relation to this article or have a need for some advice and would like to discuss your particular situation, please contact Gordon Thoms or David Conte at Calibre Private Wealth Advisers on ph. (03) 9824 2777 or email us here.


The information contained in this article is of a general nature only and may not take into account your particular objectives, financial situation or needs. Accordingly, the information should not be used, relied upon or treated as a substitute for personal financial advice. While all care has been taken in the preparation of this article, no warranty is given in respect of the information provided and accordingly, neither Calibre Private Wealth Advisers, its employees or agents shall be liable for any loss (howsoever arising) with respect to decisions or actions taken as a result of you acting upon such information.



This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial and tax/or legal advice prior to acting on this information. Before acquiring a financial product a person should obtain a Product Disclosure Statement (PDS) relating to that product and consider the contents of the PDS before making a decision about whether to acquire the product. The material contained in this document is based on information received in good faith from sources within the market, and on our understanding of legislation and Government press releases at the date of publication, which are believed to be reliable and accurate. Opinions constitute our judgment at the time of issue and are subject to change. Neither, the Licensee or any of the Oreana Group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Gordon Thoms and David Conte of Calibre Private Wealth Advisers are Authorised Representatives of Oreana Financial Services Limited ABN 91 607 515 122, an Australian Financial Services Licensee, Registered office at Level 7, 484 St Kilda Road, Melbourne, VIC 3004. This site is designed for Australian residents only. Nothing on this website is an offer or a solicitation of an offer to acquire any products or services, by any person or entity outside of Australia.

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