Smart Moves for Investors After a Down 2022

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Edward Jones - Chad Choate, AAMS

Posted on

Jan 31, 2023

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Florida - Sarasota, Bradenton & Charlotte Counties

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Many investors were glad to see the end of 2022. But what’s ahead this year? And what moves can you make in response to last year’s results? To begin with, here’s what happened: 2022 was the worst year for the financial markets since 2008, with the Dow Jones Industrial Average dropping nearly 9%, the S&P 500 losing more than 19% and the technology-heavy Nasdaq falling 33%. Several factors contributed to these results, including the moves by the Federal Reserve to aggressively hike interest rates to combat inflation, the Russia-Ukraine war, recession fears and increased concern over COVID-19 cases in China.

However, 2023 may be different. Many experts believe that inflation may moderate considerably, especially during the second half of the year. If that happens, the Fed may well pause its interest rate hikes and perhaps even consider cutting rates — a move that is often positive for the financial markets. Also, if a recession emerges, but it’s relatively short and mild, as expected, the rebounding economy may be favorable for the investment outlook.   

Regardless of what transpires this year, though, you can help move toward your financial goals by following some basic steps that make sense in all investment environments. Here are a few to consider:

Focus on the long term. It can be

disconcerting to look at investment statements containing negative results, as was the case for many people throughout 2022. But it’s important to view a single year’s outcome in the larger context — and historically, the stock market has had many more positive years than negative ones, though, of course, past performance is not a guarantee of what will happen in the future. In any case, it’s generally not a good idea to overreact to short-term downturns and make moves that could work against your long-term strategy.

Keep adequate cash in your portfolio. The

value of your investments may have gone down in 2022 — but you didn’t really sustain any actual losses unless you sold those investments for less than what you paid for them. To avoid having to sell investments to supplement your income or to 
pay for unforeseen costs, such as a major home or car repair, try to build the “cash” portion of your portfolio, so it covers a few months’ worth of living expenses.

When you’re retired, and it becomes even more imperative to avoid selling investments when their price is down, you may need an even bigger pool of available cash.

Look for opportunities. Although 2022 was certainly a down year for the financial markets, some developments have presented new opportunities for investors. For one thing, the contribution limits have increased for IRAs, 401(k)s, and Health Savings Accounts (HSAs), all of which are pegged to inflation. Also, with interest rates considerably higher than they were a year ago, fixed-income investments may offer more income and provide added stability in portfolios during times of economic weakness.

When you’ve been investing for a long time, you will experience down years in the market, such as the one in 2022. These years are an inevitable part of the investment process. But since you can’t control what happens in the financial markets, you need to concentrate on what you can control and that may be a lot more than you think. 


Chad Choate III, AAMS Edward Jones

828 3rd Ave W. Bradenton, FL 34205 
941-462-2445 chad.choate@edwardjones.com

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Local Services By This Author

Edward Jones - Chad Choate, AAMS

Financial Advisor 828 3rd Ave. W., Bradenton, Florida, 34205

Experience and Background I am a financial advisor in Bradenton, FL, and began my career with Edward Jones in 2017. As a financial advisor, I want to find out what's important to you and help you build personalized strategies to achieve your goals. As a lifelong Manatee County resident, I graduated from the University of South Florida and was a teacher in Manatee County before joining Edward Jones. My driving force is to change people's lives in a positive way, and what better place than my home to do that. Whether you're planning for retirement, saving for college for children or grandchildren or just trying to protect the financial future of the ones you care for the most, we can work together to develop specific strategies to help you achieve your goals. We will also monitor your progress to help make sure you stay on track or determine if any adjustments need to be made. Throughout it all, we're dedicated to providing you with top-notch client service. But we're not alone. Thousands of people and advanced technology support from our office can help ensure you receive the most current and comprehensive guidance. In addition, we welcome the opportunity to work with your attorney, accountant and other trusted professionals to deliver a comprehensive strategy that leverages everyone's expertise. Working together, we can help you develop a complete, tailored strategy to help you achieve your financial goals. I currently volunteer with the Manatee Hurricane football Broadcast and Booster Club, serve on my church's trustees council and have previously served as a leader in Young Life. I am a member of the Manatee Chamber of Commerce and an alumnus of their Leadership Manatee program. I have been married to my childhood sweetheart, Ashley, for 15 years and we have a son, Wesley, and daughter, Camryn. We enjoy watching our children play their sports and traveling as a family.