Position Defensively Against October Surprises…and a Glimmer of Hope for 2023?Oct19

The following post is courtesy of Diane Harrison who is principal and owner of Panegyric Marketing, a strategic marketing communications firm founded in 2002 specializing in alternative assets.

September’s ramped-up inflation fears wiped out all of 2021-22’s gains, making October a gloomy start to the fourth quarter. With the season changing and cooler weather coming, fears over prices for consumer goods, oil, gas, and the like are creating volatility that is expected to continue through October, and likely beyond. 

Investors are concerned over both their everyday living situation as well as their longer-term savings plans. According to a recent Forbes article on the market outlook: …the major risk for investors is the potential for a recession, or at the very least a slowdown in the pace of economic growth, in 2023—and that’s not been fully priced into the market yet, says Cliff Hodge, chief investment officer for Cornerstone Wealth.

“Inflation is becoming yesterday’s problem. Everyone is hot and bothered about inflation, and we expect it to continue to be volatile,” Hodge says. “What’s more important in the fourth quarter is going to be anything coming out around economic growth.”

A MAN, A PLAN…BEATS A PANIC ATTACK!

The investment community will be bombarded in the fourth quarter with investment outlooks, market forecasts, and virtually every other opinion-based article warning of what is coming and why it’s happening. Perhaps more useful to most is a gentle reminder of some of the basic defensive steps to consider as we all await our investment fate to unfold. There will be plenty of time to reconsider, reposition, and re-evaluate across our collective investment horizons, but for now, perhaps a few simple preliminary steps can help alleviate the stress that’s sure to come,

NASDAQ recently posted an article online, ‘The 5 Best Financial Moves You Can Make In October 2022’ summarized here:

1. Save emergency funding (8-12 months)
2. Pay off credit card debt
3. Max out your 401(k) contributions annual maximum (which is $20,500 if  under 50 or $27,000 if  50 or older)
4. Use your FSA Flexible Spending Account funds before they expire
5. Review your benefit plan options for the coming year for potential cost savings

These seem basic, but can have a significant impact going forward. With that piece of financial housekeeping taken care of in 2022, let’s turn the focus to potential good news that the New Year might bring for the average investor.

WHAT MIGHT BE AHEAD FOR 2023?

Quantumrun Foresight is consulting and research firm that provides long-range forecasting strategies and converts industry trends into actionable business insights. They provide data on a tremendous wealth of sectors and global latitudes, but below are just a few highlights of their 2023 predictions to keep in mind:

International relations predictions to impact the United States in 2023 include:

• The US, Australia, India and Japan jointly announce a joint regional infrastructure scheme designed as an alternative to China’s massive Belt and Road Initiative and an attempt to counter Beijing’s growing geopolitical influence. Likelihood: 70%

Economy related predictions to impact the United States in 2023 include:

• The Federal Reserve launches a real-time payment service (Called FedNow) between 2023 and 2024 to accelerate the modernization of the US payments network. This initiative will help the poorest Americans by helping them get access to money faster and pay fewer bank fees overall. Likelihood: 90%

Technology related predictions to impact the United States in 2023 include:

• Adoption of AI-augmented automation for infrastructure and operations teams in the US will increase to around 40 percent this year. Likelihood: 70%

Science related predictions to impact the United States in 2023 include:

• A cross-country solar eclipse will occur this year, starting on October 14th. Likelihood: 100% 
• Get ready for 2 solar eclipses coming to the US in 2023 and 2024

While no one can promise they know what’s ahead, a bit of defensive posturing and an optimistic outlook can work significantly to reduce this fall’s stresses, financial and otherwise.