S&P 500: Yearly Close | 2023 Outlook

Hey everyone and thanks for jumping back Into the equity verse today we're going To talk about the S P 500 yearly close If you guys like the content make sure You subscribe to the channel give the Video a thumbs up and check out the Holiday sale on into the cryptoverse Premium at into the cryptiverse.com you Can in fact see that we've brought home The yearly close here the S P 500 closed Down about 19.44 on the year and if you were to Compare that to Prior years where we had You know fairly substantial bear markets You'll notice that the 2008 bear Market Was down about 38 percent so clearly it Wasn't that bad but then you also can See during the.com crash we had three Years that were read in a row 10 down 13 Down and then finally 23 percent down So this year has been somewhere more or Less a mix of of say what happened back In 08 not not nearly as bad but also a Little bit worse than some of these Initial Initial years in the.com Crash No what I'd like to do is then switch This back over to these to the trend Lines that we've been following and it's Interesting right because despite Everything despite all the you know all The discussions about you know fake out Rallies and all this other stuff the Base case of just simply assuming that

The S P 500 will get rejected by the Trend line Continues to to pay off right Our thesis that cash remains King Continues to pay off right and and just Simply assuming that the bear Market Will continue especially Amidst a Fed tightening cycle During a period of high inflation History shows thus that this Will lead us into a bear Market as it Has right I mean this year has just been A bear Market year As we generally suspected That it would be now it it might make You then of course question well what's In store for 2023 One thing to remember is that these bear Markets can actually last quite a long Period of time and bear markets that Include recessions tend to last over a Year okay so if they don't include a Recession I think typically they're less Than a year but when they include a Recession they can go on for for well More than a year and if you're to Compare this bear Market to all prior Bear markets this is what it currently Looks like so this blue line in here is The 2022 bear Market if we hide all of Them and then compare the spare Market To say the financial crisis this is what It looks like And that was around this time actually

That the financial crisis Experienced a a major drop where we Essentially ripped the Band-Aid off and I know that might seem seem quite scary On the contrary this would actually Probably be the less painful solution if We were to just rip the Band-Aid off if You if you compare what came after the Financial crisis and after we ripped the Band-Aid off and you take this out Towards the next Peak you can see you Know what ultimately came after it Sometimes ripping the Band-Aid off isn't Necessarily the worst thing Um but what you'll also notice is if you Compare this to say the the.com crash You'll see that the bear Market there Didn't really have a period where the Band-Aid just got ripped off It's dead it was just a slow systematic Plea So we have to be prepared for this right We have to be prepared for a longer bear Market Um than you know than one of the ones We've seen right in a long time I mean If you look at the S P 500 for the last Decade it's been mostly just up right Look at this it's really February of 09 It's mostly been up this is really the First time we've had a bear Market That's you know that's kind of lasted And you'd have to really go back to the Financial crisis or 2008 to find a

Period that is at least somewhat similar In terms of the the duration of the Drawdown and the degree to the drawdown And I mean so far this one still does Not compare to the duration or to the to The degree or the duration of these uh Of these two prior bear markets both of Which saw the s p drop 50 now the s p Doesn't necessarily have to drop 50 or 60 but one of the things to consider Here is that it could certainly last Um you know quite a bit longer than it Than it already has and you might say Well why are we so confident about a Recession well first of all we shouldn't Be overly confident about anything you Know anything can always happen but I Think one of the reasons why the base Case continues to be That we will experience a recession is Because I mean we can see things like The yield curve have inverted we know That when treasury yield spreads like on The three month and the ten year or the Two year in the 10-year when we see them Invert like this and especially for this For this duration We usually come out of it into a Recession and it's usually During that recession that the S P 500 Bottoms with the exception of say The.com crash where the bottom came After the recession but normally it Actually comes during the recession and

The other thing to consider too is that Normally the S P 500 bottoms once the Unemployment rate starts to go up right But it also bottoms before it Peaks the Unemployment rate has not really started To go up yet so I think one of the Things we're probably going to be Looking towards in looking to see in 2023 as painful as it might be is the Unemployment rate going up and ushering In some type of of a recession due to The FED continuing to raise interest Rates unfortunately they've felt Compelled to and I think they made the Right decision because they need to get Inflation back under control If they were not to act aggressively As they have we could run the risk of Repeating something like we saw in the 60 in the in the 70s and the early 80s Where you essentially saw you know a Decade where the market was more or less Flat and we put in slightly higher highs And slightly lower lows I would prefer Not to go into a period you know Something like this Where we just get into an inflationary Decade I would prefer not to see Something like that so while it is Painful to you know to deal with high Inflation and it's painful for a lot of People to deal with Rising interest Rates when the economy is slowing down I Do ultimately think that it will help

Bring inflation back down a recession Will help bring inflation back down It'll help us find our Bottom in Risk assets and then I think That will provide generational Opportunities for quite a lot of people So you know in 2023 I'm of the general Opinion that the S P 500 Um you know will eventually put in a new Low and um and then hopefully you know Hopefully we can sort of build out a Base that we can climb out of in you Know in say like the 2024-2025 time frame but again so far This year as you can see I mean just Quite frankly a pretty pretty you know Bad year for the S P 500 not that it's That surprising you know cash is King This year we know that my general Expectation is that cash will remain King For at least part of 2023 but likely not All of 2023. Hope for this video series On equities and the S P 500 has been Useful make sure you subscribe if you Haven't subscribed give the video a Thumbs up And remember to check out the holiday Sale on into the Crypt Everest premium Add into the cryptoverse.com thank you Guys for tuning in subscribe and I'll See you next time bye


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