2023 Looking Back

As 2023 draws near its end, numerous economists and analysts issue their 2024 outlooks and forecasts. In looking at the current state of our world, there are plenty of negative headlines to factor in, and most outlooks for 2024 are centered around how bad the coming recession might be, not if there will actually be one or not. In the spirit of the optimism brought by the fresh start of a new year, I wanted to provide a summary of the positive developments that occurred over this past year, and some reasons to be hopeful for things to keep getting better in 2024.

Positive Developments in 2023

• Canadian inflation declined from 6% at the start of the year, and from a high of 8% in 2022, to 3.1% as of October’s reading

• US stock indexes rallied to start the year and continued to ascend throughout the year, and aside from a pullback from August through October, are set to finish at or near the highs of the year

• Canada’s TSX Composite index also rallied to start the year, and despite trading in a sideways range over most of the year, is still poised to post a small gain for the year

• The pace of interest rate increases slowed down dramatically, with the Bank of Canada currently on its second “pause” of the year, potentially marking the peak in this interest rate hiking cycle

• After rising since spring, bond yields peaked in October and have come back down, retracing roughly half of this year’s increase

Reasons for Optimism in 2024

• Inflation should continue to trend lower as long as interest rates are maintained at current levels

• Interest rates shouldn’t go significantly higher, if at all, and could start to decrease towards the end of the year

• While signs of an economic slowdown are starting to show up, the US is heading into the end of the year with a surprising amount of economic strength in the face of higher interest rates, decreasing the chance of a major recession in the coming year

• Stocks could continue to rally if inflation keeps trending lower and the economy continues to avoid a major recession, while bonds are also poised to rebound in value if interest rates start to come down

To avoid being overly optimistic, we still need to keep in mind that there are above average levels of uncertainty and turmoil in the world, which could swiftly derail the progress of “getting back to normal” made over the past year. Hopefully we see resolution to some of the military conflicts currently ongoing around the globe, rather than an escalation or increase in number of them in the coming year.

One thing is for certain though, nobody can clearly see the future. When everyone seems to agree that one thing will happen, often the exact opposite thing ends up happening. The only thing we can truly control is our own mindset and reactions to events in our life and the world around us. There is plenty of negativity in the world, especially online, so try to be conscious and aware of it, and try to focus on the positives in your life instead. It can be amazing how a small change in perspective and attitude can affect your level of happiness, and the best part is it is free to do!

Best wishes to you for a happy, healthy, and prosperous 2024!

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- Dennis Rubeniuk,  Investment Advisor

Disclaimer: This information has been prepared by Dennis Rubeniuk, who is an Investment Advisor for iA Private Wealth Inc. Opinions expressed in this article are those of the Investment Advisor only and do not necessarily reflect those of iA Private Wealth Inc. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.