Keeping an Eye on 2023


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January 1, 2023

HAPPY NEW YEAR!:  It sure felt weird to type in that date above.  Yes, its 2023.  When Y2k was the big fear, where did you think you would be, and what did you think you would be doing, in 2023?  Well its here.  It is now your reality.  So what do you think you’ll be doing in 2030?  I hope 2023 is a great year for you.

CRAWLING ACROSS THE FINISH LINE:  Stocks finished the year with little movement, crawling across the finish line of a very, very difficult year.  When working with clients, we always try to prepare them for years like this because they are inevitable, but it doesn’t make them easy.  Bad years are always unique from other bad years, and negative emotions can lead to foreboding and panic, and thoughts that it will never end, or last longer than any other prior bad stretch.  So what has 2022 brought us?  For the S&P 500, it has been the worst year since 2008 and the seventh worst year ever.  Meanwhile, the Bloomberg U.S. Aggregate Bond Index ended down over 12%, the worst showing ever (that index only goes back to the 1970s).  That combination of horrific years for stocks and bonds ranks this as one of the worst overall investing years ever.  If you weathered this storm with a financial plan that is still working, be grateful.  If you don’t know, get your plan updated. 

SO WHAT DID THE EXPERTS THINK?:  The S&P 500 ended the year at 3844.82.  JPMorgan, Goldman Sachs and Citigroup were all bullish in the beginning of the year, predicting 5100, 5050 and 4900 respectively.  Bank of America was bearish, but predicted only a 3% drop to 4600.  Most expected inflation to go away more quickly, and thus no one predicted the aggressiveness of the Fed which engaged in the biggest rate rises in a year since 1981.

Most of the experts I am following are predicting a shallow recession in 2023 as the lagging effects of rate rises occur, lowering inflation but not as low or as fast as any of us want, the Fed going up to about 5% and sticking there for most if not all of the year.  What will happen with stocks?  Of course, we don’t know, and watching this in real time will be as critical as ever, but here are the scenarios:

  • We have a mild recession early in the year, which brings down inflation, which causes the Fed to ease up, which causes the S&P to rally by about 10% by year end.
  • The Fed over-tightens, sending the economy into a more serious recession and stocks end the year lower than they are now.
  • The Fed succeeds in bringing down inflation without causing a recession, and stock stage a major rally.

LONGER-TERM PERFORMANCE:  Below are the annualized three-year and five-year numbers for these same indices.  

SALES OF EXISTING HOMES CONTINUE TO FALL WITH RAPID INTEREST RATE RISE:  Sales of existing homes in the U.S. declined by 7.7% in November from the prior month, the 10th straight month of declines.  Higher rates and higher prices are the obvious culprits.  Mortgage rates have more than doubled and home prices in 2022 appear to have risen by about 7%.

HEALTHY YEAR FOR U.S. HOTELS:  U.S. hotel occupancy did not keep up with 2019, but it got above the 2000-2020 median early in the year, and ended above that line.

FINANCIAL ANXIETY IN THE U.S.A.:  One of the dynamics we have focused a great deal on at Stonecrop Wealth Advisors is anxiety.  No matter how much or how little wealth people have when they begin talking to us, most are very anxious, and all seem to be at least somewhat anxious.  We want to help alleviate that anxiety.  But, it is not all about the money.  One of the lines we have found ourselves repeating more and more, and which almost always gets head nods in agreement, is, “We are living in one of the richest countries in the world at the richest time in the history of the world (by far), and yet we are all walking around anxious about our money.  The problem can’t be just about the money.”  

I was reviewing some worldwide data this past week, and I think we are going to amend our statement to say we live in “the richest country on the planet,” not one of the richest.  According to the World Inequality Database (, you have to have income of almost $350,000 per year to be in the top 1% in the U.S.A.  No other country comes close.  The next richest is Germany where you have to earn a tad over $200,000 to be in the top 1%.  In Canada, Great Britain and Australia, if you earn between $150,000 and $200,000 it will put you in the top 1%.  What about the 50th percentile?  In the U.S. you have to earn around $32,000 (seems low, but this is what this website’s data says) annually.  Again, we are number one.  Germany’s 50th percentile is approximately $29,000 and Australia is about $27,000.  In the world, an annual income of $32,000 puts you in about the 87th percentile.  In India, if you make $32,000 you are in the 96th percentile, or higher.  You are right around the 90th percentile in Mexico, Colombia, Argentina, Russia, Egypt, and China if you make $32,000 per year.  In the U.S., Canada, Germany, Great Britain, and Australia, if you make about $4,000, you are on the bottom 10th percentile.

EYE COULD NOT TURN AWAY:  As readers of this newsletter know, I was in Dallas over Christmas weekend.  We ended up dining at a very nice restaurant in downtown Dallas, but the whole time we were eating, this (below) was staring at us from across the street.  No one had a good answer as to why it was there other than just, “art.”

GOALS:  It is time for the traditional “New Year’s Resolutions”.  I prefer to focus on goals.  One year from today, what do you want to accomplish?  Do you want to lose ten pounds, add $5,000 to your college fund, pay down an extra $5,000 on your mortgage, run a five kilometer race in under 25 minutes?  Are your goals more vaguely described such as “I want to be a better dad/mom, husband/wife, or friend”, or “I want to worry less”.  The most important thing I find about goals is that you have to think about the steps you will take to accomplish them, and if you take some or all of those steps, you will be accomplishing something even if you don’t hit your exact target.  Take a few moments and jot down at least one thing you want to accomplish by this time next year, one thing that if you accomplish it will improve your life substantially.  Also, as you jot down goals, make sure they are connected to something you really care about.  For example, instead of, “I want to lose 20 pounds,” make it “I want to be a positive role model and mentor to my children for many, many years, and so staying healthy is very important, and thus I want to lose 20 pounds this year to improve my overall health and longevity.”  If you connect the goal to something deeply important, it will improve your motivation and likelihood of success.

Have a great year!

Our mission is to help you see the objective, find the path, and navigate past the obstacles to a more prosperous future.

Douglas R. MacGray, J.D., C.F.P. ®
Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax
(610) 628 4545

“Life sometimes brings enormous difficulties and challenges that seem just too hard to bear.  But bear them you can, and bear them you will, and your life can have a purpose.”  Barbara Walters

“We live in a society in which it seems that every space, every moment must be ‘filled’ with initiatives, activity, sound; often there is not even time to listen and dialogue… Let us not be afraid to be silent outside and inside ourselves, so that we are able not only to perceive God’s voice, but also the voice of the person next to us, the voices of others.”  Pope Benedict XVI

“The old has gone, the new has come!”  II Corinthians 5:17 (NIV)


(c) 2023 A.D., Stonecrop Wealth Advisors, LLC, All Rights Reserved

*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets. 
*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States. 
*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets. 

Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission. 



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    Doug MacGray

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    January 2, 2023


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