Bloomberg: “Investing Lessons From 2022 to Boost Your Portfolio Next Year”
Bloomberg, Dec. 19, 2022 — Marguerita Cheng, CFP® Pro, is featured in today’s article by Charlie Wells and Claire Ballentine who asked advisers and analysts to look back on their best and worst calls of the year — and offer ideas on ways retail investors should position themselves heading for 2023.
“To say the past year has been a disappointment for retail investors would be an understatement,” the reporters write. “Many were drawn into the markets by the pandemic-era exuberance that fueled by low interest rates: Stocks surged, crypto boomed and markets popped. And then 2022 landed with a thud.”
Not only that, but “consumers also struggled with the Russia’s war in Ukraine, persistent inflation, rising interest rates and fears of a recession shifted the landscape, with the S&P down nearly 20% and the Nasdaq slumping more than 30% as the year comes to a close. Bitcoin has been even worse, plunging more than 60%.”
The questions to Marguerita:
What did you get wrong this year? “I don’t enjoy the car-buying process. I didn’t want to deal with drama and high dealer markups so I missed the opportunity for the tax credit for an electric vehicle.”
What did you get right? “I helped clients satisfy required minimum distribution requirements prior to Russia invading Ukraine. I told clients that if they didn’t need the funds right away, to deposit them in the savings account. It’s true that I would not be liquidating stocks, stock mutual funds or stock ETFs in the short term. However, this gave clients tremendous peace of mind.”
How are you telling clients to position themselves for 2023? “I’m encouraging tried-and-true strategies such as diversification and dollar-cost averaging. I’m also encouraging clients to take advantage of tax diversification Roth accounts and taxable accounts.”
What is the single best opportunity you see in the year ahead? “Some people think they need wealth to invest, but they need to invest to build wealth. My son received his first paycheck from his job as a research fellow in September 2022. He started contributing $500 per month to a Roth IRA. Personally, I’m very excited about plant-based innovation, next-gen healthcare and smart-grid infrastructure.”