As we reach the midpoint of 2023, we find ourselves wondering what is in store for the remainder of the year. The U.S. economy is defying predictions of a 2023 recession. As a Financial Advisor in Murfreesboro, TN, we are discussing the outlook for the remainder of the year with our clients.
The markets have reached more balance, which is good news from an investor’s point of view. No longer does investing in a specific sector with disregard to everything else lead to success. In recent times, you could borrow at nearly zero percent without worry of the consequences of free money, the threat of inflation, or the possibility that banks may raise rates. That is certainly not the case as we enter the second half of the year. Times have changed, and opportunity exists despite the rolling nature of this cycle as opposed to an “everything all at once” type phenomenon of past cycles.
On the flip side, although opportunity exists, risks have grown in other areas over time. The Fed beginning the most aggressive tightening cycle in 40 years has created a fog of uncertainty. Policy risk has an increased presence as relations with China come into question, the potential escalation of the war in Ukraine, and a potential crisis in the banking sector. Although each of these speed bumps create short-term discomfort, we must be willing to embrace them to maintain focus on the long-term success.
Given the uncertainty of the world and the anticipation of a recessionary time, there is a lot of cash on the sidelines these days. Investors have anointed cash as king, as the flight to cash has surpassed that of the pandemic and financial crises. Based upon historical cycles, levels of cash often peak as the market experiences a trough. Therefore, it may be time to consider putting some of the excess cash to work if you stacked it up to feel more secure following the painful losses of 2022.
No matter the speed bumps we may face the remainder of the year, we will continue to be a resource to you by providing guidance to help you succeed. If you have questions, or you’ve been meaning to connect with us, let us know. As a Financial Advisor in Murfreesboro, TN we’re happy to help!