While the past couple of years have certainly been challenging for investors, it’s important to remember that the stock market is a long-term game. It’s normal for there to be ups and downs, and it’s important to keep a long-term perspective and not get too caught up in short-term market fluctuations. The start of a new year is a great time to reassess your investment strategy and make sure it aligns with your financial goals. It’s also a good opportunity to diversify your portfolio and consider adding assets that may have been undervalued during the recent market turbulence. With a little planning and patience, the new year can be a time to set yourself up for investment success in the long run.
It’s true that value stocks, which are stocks of companies that are trading at a lower price relative to their fundamental indicators such as earnings and book value, can be a good alternative to growth stocks in times of economic uncertainty or rising inflation. Value investing is based on the idea that these undervalued stocks have the potential to generate superior returns over the long term as the market recognizes their true value.
Be sure to check out Mike Khouw’s Post here.
It’s always a good idea to have a list of potential investment opportunities that you can consider when the market presents a good buying opportunity. When looking for potential stocks to add to your list, there are a few factors you might want to consider:
- Financial Health: Look for companies with strong financials, including a healthy balance sheet and consistent profitability.
- Competitive Advantage: Consider companies that have a unique product or service, or that operate in a niche market where they face less competition.
- Management Team: The leadership of a company can play a big role in its success. Look for companies with a proven track record and a clear vision for the future.
- Growth Potential: Consider the potential for the company to grow its revenues and profits in the future. This could be through expanding into new markets, introducing new products or services, or improving operational efficiency.
- Valuation: Finally, consider the stock’s price in relation to its fundamental indicators such as earnings and book value. If a stock is trading at a discounted price relative to these metrics, it could be a good value opportunity.
It’s worth noting that no investment is without risk, and it’s important to do your own research and carefully consider your own financial goals and risk tolerance before making any investment decisions.
To get you started in 2023, here are some good dividend stocks that are a good buy in 2023. Let’s see if Mark can get an option trade for us on any of these.
- Procter & Gamble (PG): This consumer staples giant has a long history of steady, reliable dividend growth and a strong track record of profitability.
- Johnson & Johnson (JNJ): This healthcare conglomerate is known for its diversified portfolio and strong dividend growth.
- PepsiCo (PEP): This consumer goods company has a diverse range of products and a history of steady dividend growth.
- IBM (IBM): This technology company has a long history of dividend payments and has consistently increased its dividend in recent years.
- Nestle (NSRGF): This global food and beverage company has a strong dividend track record and a diverse range of products.
The start of a new year is a great time to reassess your investment strategy and consider adding undervalued assets to your portfolio. While value stocks may be a good alternative to growth stocks in times of economic uncertainty or rising inflation, it’s important to diversify your portfolio and carefully consider your own financial goals and risk tolerance before making any investment decisions. Dividend stocks can also be a good option for investors looking for a reliable stream of income. It’s always a good idea to do your own research and stay up to date on market trends and news to make informed investment decisions.
Economic Calendar
Briefing.com has a good U.S. economic calendar for the week. Here are the main U.S. releases.
Briefing.com
Last Week’s Numbers
Review Last week’s numbers here.
Earnings
Source I/B/E/S data from Refinitiv
Global Spotlight
Western insurers are ceasing coverage for marine traffic based on war-related risks in Russian, Ukrainian and Belarusian waters as of January 1st, 2023. This is due to reinsurance companies notifying insurance companies that they will no longer reinsure losses caused by wars. With this move, it’s essential now more than ever for business owners shipping through the region to ensure their ships have the necessary protection against any potential conflict-related incidents. The decrease in coverage will cause some tankers to abstain from navigating through Russian waters, even within the Far East of Russia, or compel them to move without insurance. As a result of the increasing transportation costs for goods, such as oil and gas, that are transported to and from Russia, Ukraine, and Belarus, governments may work towards providing insurance guarantees. As an example of this in action – when Western insurers were prevented from offering coverage due to sanctions imposed by other countries – Japan had previously provided similar coverage for cargoes coming out of Iran. Executing these same tactics again with Russian marine traffic would require new laws and instruments devised by those governments who choose to participate.
On January 1st, Sweden assumes the six-month European Council Presidency; a political role that will empower them to facilitate conversations between the EU’s 27 countries and promote their own policy objectives. Although this position does not offer any legislative power, it is still an invaluable opportunity for Sweden to drive forward change in Europe. During Sweden’s presidency of the EU, one of its primary objectives will be to ensure ongoing political and economic assistance for Ukraine. This entails advocating for harsher sanctions on Russia—a strategy that Poland and Baltic states are likely to back up. Nevertheless, to reach a consensus among Western and Southern members of the European Union, concessions must be made about protecting their economies from being overly affected by the penalties imposed. As Sweden encourages the expansion of free trade agreements, there is likely to be mixed outcomes. EU members will embrace deals that grant them access to vital imports such as lithium and rare earth minerals, however, nations with large agricultural industries including Italy, France, and Ireland are reluctant in liberalizing negotiations with countries like Mercosur or Australia. Sweden will likely face strong opposition from France and other member nations of the EU who seek to bolster protectionism to counter similar measures taken by China and the United States. As such, Sweden’s efforts to liberalize internal market regulations within the bloc could be met with great resistance.
On January 1, 2023, Brazil will inaugurate Luiz Inacio Lula da Silva as president following his narrow victory in October’s presidential election. Thousands of supporters and anti-da Silva protesters are expected to gather in Brasilia as well as other major population centers such as Sao Paulo and Rio de Janeiro. This promises to be a momentous day for the nation of Brazil. Undoubtedly, his presidency will bring about a heightened campaign against the deforestation of the Amazon rainforests, an expanded government interference through the economy and society, as well as ongoing extensive investments in social welfare.
Starting from January 5th, the United States is now requiring that all Chinese passengers have a negative COVID-19 test result before boarding flights. Additionally, India will be instituting a similar rule for travelers coming in from China as well as Japan, Singapore, Thailand, and South Korea – it will take effect come Jan 1st of this year. As the post-lockdown COVID-19 outbreak in China intensifies, restrictions imposed on not only Chinese travelers but also those from East Asia and beyond could resurface soon – a consequence that may jeopardize global economic recovery while augmenting Western concerns of an imminent recession. This impact can be even more severe if novel COVID-19 strains develop among the largely untested Chinese populace.
