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Let's review the 2022 stock market. Last year was a winning year for the diversified portfolio. International stocks outperformed the U.S. stock market, despite the U.S. dollar strengthening. Short-duration bonds outperformed long-duration bonds due to the rapid rise in interest rates. Quality, high-dividend-paying stocks outperformed the overall stock market by a wide margin.
Inflation raged across the globe in 2022. Central banks hiked rates to try and tame inflation/demand. The rate hikes appear to be working, but there are signs of a global recession looming because of tightening. A deep recession is looking less likely now as the base case looks to be a mild recession.
Quality stocks with immediate cash flows have outperformed during past recessions, and they should continue to be a winning strategy in 2023.
What do we expect this year?
Expect more of the same in 2023. Volatility should remain high, with uncertainty around interest rate hikes and a global recession looming. International markets should benefit from a surge in demand with China reopening. However, demand from China could create more inflationary pressure if supply lags. The negative impact of inflation could more than offset the economic growth spurred by reopening. This is something to keep an eye on in 2023.
International stocks could continue to outperform in 2023 and into the future. U.S. stocks have outperformed for many years. Global stocks have low valuations and much ground to make up. International stocks also tend to have more quality characteristics that perform better during recessionary periods, like higher dividend yields and cash flows.
The fed is unlikely to change its tune on inflation until there are clear signs of disinflation. The fed wants a trend, not a single data point showing inflation is subsiding. This will take time. As a result, there is a low probability of rate cuts in 2023. It's more likely that hikes will continue through the first half of the year. However, the size of rate hikes may decrease/pause so that previous hikes can take hold.
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This commentary contains general information that is not suitable for everyone. The information contained herein should not be construed as personalized investment advice. Past performance is no guarantee of future results. There is no guarantee that the views and opinions expressed in this commentary will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.
Wes knows what's best for dental practices. He's been doing this for a long time and he sees lots of practices. He can tell me how our practice is doing, and what we can do to increase our productivity. With past CPA's, there were no ideas. It was all coming from me, saying "I think I can do better, but I don't know how." I come in to meet with Wes and he says "You CAN do better, and I know how."
PracticeCFO is in hundreds of dental offices around the country. They know what numbers should look like. They know what percentages of payroll, rent and supplies should be, and they will hold you accountable to those numbers, which will really help you stick to your plan and your path of growth and savings. That is invaluable
Whenever something comes up, whether it's building or practice related and we weren't sure where the numbers would go, PracticeCFO has been instrumental in helping us figure that out. I can't say enough of how important that is - that it goes beyond that initial partnership. They make sure this business marriage works.
When I go home from work, I don't spend a whole lot of time stressing about what my books look like, or how much I owe in taxes. By using PracticeCFO, the burden of keeping track of a lot of the big financial numbers and metrics are taken off my plate.
PracticeCFO helped me develop a plan for the future. I have colleagues that work with other accountants that don't have a plan - they just look at the numbers of the practice and that's it. There's no plan for 10, 20 years from now. But with PracticeCFO, you get that. PracticeCFO makes you feel like you're they're only client.
(In reference to his practice sale) What could've been super stressful, wasn't! When picking John and Wes, it was from word of mouth recommendations and other people's experiences from the past that really did it for me. And it turns out that those recommendations were right on the line.
Wes knows the business side of dentistry. His comprehensive plan will organize your personal and professional finances so you can focus on taking care of patients. Massive ROI.
I can’t say enough good things about everyone at PracticeCFO. Everyone on the team is professional, organized, knowledgeable, helpful and kind. They also respond to emails and phone calls immediately and are always happy to help. They have helped me navigate year-to-year as a business owner. PracticeCFO gives me peace of mind that my business is in good hands.
I love Practice CFO! They have helped me obtain a practice and maintain a practice. They are incredible people who are on top of everything and make owning and running the business portion of a practice easy. They couldn’t be better for my business and my sanity. They have every detail of the business and taxes taken care of where all I have to do is show up and follow their easy steps to success!
Practice CFO has the best tools I’ve seen for personal tax and financial planning in addition to top-tier corporate tax and accounting services. I have been very pleased with the level of quality service. They manage my monthly bookkeeping and accounts payable. It is a great system and saves me a ton of time, and it allows us to have monthly financial statements within a week of month end.
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