In 2022, the stock market experienced a significant downturn. The S&P 500 index fell by 20%, marking its worst performance since the global financial crisis in 2008 when it saw a 38.4% downturn. The Dow Jones Industrial Average also closed the year down 8.5%, while the Nasdaq dropped by 33%.
Investors and analysts attribute these numbers to various factors, including economic uncertainty and the impact of the ongoing COVID-19 pandemic. However, heading into 2023, investors remain positive about a bounce back in the year.
In a new report by CNBC Delivering Alpha investor survey that gathers investors’ opinions and expectations, many investors are optimistic that the S&P 500 index will rise like a phoenix in 2023.
The report details that four out of ten market participants are positive that the S&P 500 index will increase by more than 5%, while two out of ten believe it will rise by 10%. In addition, the report notes that around 5% of the interviewees expect the index to rise by 20%.
Investors who participated in the survey are optimistic about the stock market prospects and are planning strategic investments in particular markets and companies. According to the report, 42% of respondents said they would heavily consider energy stocks, while 58% chose between high-dividend, financial, and healthcare stocks.
According to the survey, many respondents plan to invest in specific companies in the coming year. Specifically, 37% of respondents said they would invest in Amazon, with another 37% saying they would invest in Alphabet, Google’s parent company.
An additional 17% of respondents said they would invest in Tesla, while 6% said they would invest in Netflix. Lastly, 3% of respondents say they would invest in Meta.
Even though this data shows high optimism, other surveys would beg to differ. For example, according to another CNBC survey, millionaire investors who took part in the survey are relatively bearish on the outlook for the S&P 500 in 2023.
However, according to the millionaire survey, most respondents think the index will decline by at least 10%. It’s worth noting that these are just the expectations of a group of investors, and it’s common for market participants to have differing views on the market’s direction.
The average investor must maintain a level-headed and realistic perspective as we continue the new year. Economic downturns are a normal part of the economic cycle and happen periodically. While a recession can be difficult, it’s essential to remember that the stock market has historically shown a strong capacity to bounce back over time.
Therefore, it’s essential to be aware of potential risks, keep a long-term perspective, and not worry about short-term market fluctuations.