Navigating 2023: Sarwa's Year in Review

As we take a comprehensive look back at the entirety of 2023, we witness a year characterised by triumphs amidst difficulties that have significantly shaped the economic landscape. Despite headlines, market sentiment, and at times, atrocities of our world, the resilience of our economy throughout 2023 has been truly remarkable.

The S&P 500, a historical marker of market performance, has shown a noteworthy trajectory, marking a +14% increase by the end of June and an impressive +22% by the close of December. Remember when we said a positive performance in the first half of the year mostly led to a rallying second half in decades prior? Guess the trend persisted after all.?

Looking ahead, it’s important to remember that Wall Street analysts were very wrong when it came to market performance conjectures in 2023 (I mean, what’s new really?). It’s difficult not to blame them for predictions that end up informing thousands of investment decisions. If you’ve been listening to their prophecies for 2024, then consider their earlier forecasts for 2023 which claimed, according to Bloomberg data, the S&P 500 would conclude 2023 at 4,078, projecting a 6.2% increase from its starting point at the end of 2022. Their crystal ball must have been cloudy or something.?

Current predictions for 2024 are positive, likely because 2023 was a wonder year for stocks. And if the market continues to grow, predictions are bound to reflect positively as well. All of this to say, invest humbly, no one actually knows where the market is heading, how it will shift, or when the tides will change. And if you’re reading this, then you’re in it for the long haul anyway.

It’s easy to look back at this past year and regret the decisions you’ve made, but hindsight is 20/20 after all. If you wish you had invested sooner or invested more when the market was down, then the good news is that there will probably be other downturns. Don't wait for the "perfect time" to jump into the market. Recognise that delaying means missing out on opportunities to put your money to work, and true courage lies in practising patience.

How did Sarwa’s portfolios fare during 2023?

Amidst this economic and geopolitical backdrop, Sarwa portfolios have navigated the challenges admirably, adapting to the evolving market conditions throughout the year. The Conventional portfolios, catering to various risk appetites, have shown an average gain of +11.60%. Notably, conservative portfolios, designed for caution, exhibited stability with comparatively lower growth rates. In contrast, growth-focused Conventional portfolios led the way with an impressive +14.36% increase by December 2023.

Before proceeding to the next section, let's address any concerns you may have regarding your returns this year. If you've noticed variations or even positive returns in our portfolios that are not reflected in yours, there's a simple explanation. The timing of your entry point in the market significantly influences your returns. Market timing is crucial, and differences in your entry (or exit) points compared to broader market trends can explain variations in returns. If you have specific questions about your investment timing, please don't hesitate to reach out. We're here to have a conversation and provide clarity.

Examining asset performance, the correlation among assets lies in their responsiveness to overall market trends. While BND and BNDX show less sensitivity to market behaviour, they still register upward shifts during periods of market growth. IEFA, with its international focus, has performed impressively well, showcasing outstanding long-term growth potential by maintaining exposure to Europe, Australia, Asia, and the Far East.

With a YTD performance of +23.08%, the tech-heavy ETF VTI has showcased an impressive performance. This can be attributed to the remarkable surge of the Magnificent Seven this year. With substantial exposure to powerhouse stocks such as AAPL, TSLA, NVDA, MSFT, AMZN, GOOGL, META, and others, the push for high returns and sustained growth in VTI becomes even more evident. Some may even argue that AI’s watershed moment may have contributed heavily to tech’s performance, others claim that AI fueled an already flourishing tech-saturated market environment.

Fundamentally, Sarwa’s portfolio performance is closely tied to the market's overall health. When market conditions are favourable, our portfolios typically yield more positive outcomes, underscoring the principle that a thriving market environment often leads to superior investment results.

As we venture into 2024, let's continue building on this financial foundation. We're here to help you make informed investment decisions.

*Disclaimer: The numbers, figures, and projections presented here are derived from internal data. It's important to note that they should not be construed as definitive or externally validated information.