As 2023 comes to an end, we are all once again in the familiar state of looking back on our year and tallying up the changes that have occurred. Hopefully, you can look back on this year and think of some of your personal victories. One place that might be lacking is in the world of finance. 

The year 2023 was an up and down one for markets, and the main sentiment was one of uncertainty. The stock and bond markets seemed to yo-yo up and down throughout the year while interest rates continued to rise in the face of stubborn inflation, and a recession seemed to loom throughout the year. As a result, you might look back on this year and think it is time to make some drastic changes to your portfolio. But is that really the best course of action

The end of each year is a great time to reflect on what has happened and revisit your initial goals. Maybe you were looking to grow your portfolio through continued contributions, withdraw income to fund your retirement, or maybe you were attempting to establish your first substantial savings. 

Regardless of what your goals were, you should think about what you were trying to achieve and compare it to what you did this past year. Instead of worrying about what direction the market is moving, think about whether your goals are any closer to completion at year end. Doing this helps to reframe the problem away from market movement and toward factors that we can control. 

The old adage goes, buy low and sell high. This can be difficult because it is when markets are at their lowest that we are most afraid of further capital loss. If the market anxiety is still too much to bear, consider adding to your fixed income portfolio. Given the high interest rate environment, there is a significant opportunity for bonds, GICs and other fixed income instruments, which are all paying substantially better interest than they were even a year ago. 

At the Kozak Financial Group, we certainly have not been shy about reinvesting in fixed income. Even if interest rates continue to rise in the short term, the high rates available now are nothing to turn up our noses at, especially considering how low interest rates were in the depths of the pandemic. 

The end of the year is also a great time to reflect and consider your expectations going forward. Over the past year, many portfolios have increased their income generation significantly, both on the back of higher interest rates and consistent dividend hikes coming out of stocks. Focusing on a highlight like this can help to ease the pain of down markets and re-establish the focus on long-term investment performance. 

Given what has occurred in the past year, try factoring that information in to your expectations for next year. It isn’t always the easiest thing to do; if we all had our say, our investments would be up year after year. 

Unfortunately, we must push through down periods in order to enjoy the high growth periods that follow. 

Hopefully, you are able to look back on 2023 and see the good through the bad. 

If you are left wondering what to do with your investment portfolio, or wondering if you should be making changes, reach out to our team at 403-260-0568 or visit our website at kozakfinancialgroup.com. We would be happy to consult with you on what your best next steps might be.