Choppy Times Ahead: 2023 Begins in a Jumble

(Photo by Chris Chan at

Disclaimer—I don’t know the future—and neither does anyone else. Take the outlook for recession, for example. Nearly everyone says we’re going to get one. The Conference Board recently reported that 98 percent of CEOs expect a recession. Ninety-eight percent—yikes!

It’s my job to look at indicators, listen to analysts, and try to figure out what’s most likely going to happen. I’m having a hard time finding any bulls. Even my most reliable bulls are saying to expect market volatility this year, with the potential for another 15 to 20 percent down, because there’s going to be a recession, they say. And if there’s a recession, corporate earnings can be expected to drop, and with them, stock prices.

The most optimistic analyst I can find has recession probability at only 35 percent. He’s the only person I’ve come across that gives recession less than 60 percent probability—and his boss is laying off people in preparation for recession!

So is it a done deal? We’re going to have a recession? Maybe. In my long career, I’ve lived through a few recessions. I don’t recall any that were advertised in advance. I do recall several times that talking heads were calling for recessions that didn’t happen. So, yeah, maybe there will be a recession. There’s a lot of good reasons to think there will be. But I’m kind of itchy here. Whenever everyone is saying the same thing, it usually doesn’t happen.

John Maynard Keynes famously said, “The inevitable never happens. It is the unexpected always.”

So let’s go back to the beginning of this article, the part where I said I don’t know the future. Right now, this is looking very much like several markets I’ve seen before. Pretty much everyone is bearish, but the market is quietly rising. No one has any good ideas why it should be rising, but it keeps on doing it. Choppy and uncertain, quietly rising.

Here are a few things I know. Inflation has been slowing. The Federal Reserve may not be done raising rates, but if they are not, they are likely close to the end. At some point in the future, the current paradigm of higher than desired inflation and rising rates will give way to another paradigm. Today’s gloom will likely be forgotten.

If we have a recession—and please remember that we are not in a recession now—it’s difficult to argue that it will be a deep one. The reason is that there’s plenty of work. Right now there are 2 million job openings going unfilled. The economy is slowing and the number of unfilled jobs has been declining, but big unemployment seems very unlikely.

With 2 million unfilled jobs, companies are having trouble hiring enough people. If business is slowing, will they let people go, knowing they might not be able to hire them back or find any replacements? I think a lot of companies will be reluctant to do that.

So unemployment could rise some, but having masses of unemployed people seems unlikely, and if people have jobs, they have money to spend. I have a hard time seeing how we get a deep recession. I know there are prominent voices saying otherwise, and maybe they will be right.

But for now, there is no recession. It’s only a forecast. No matter how many people forecast it, it only exists in our imagination.

I’m not saying there won’t be a recession. But I am saying that when all the bulls have disappeared, that’s when the probability of a new bull market starting is higher. Instead of being afraid of markets, consider that when prices are high and rising and everyone is happy, that’s when the potential for future returns is lower. It’s times like these when the potential for future returns rises.

Maybe prices have to stay down for a while longer. Maybe they will drop lower, as some are predicting. But we can’t know exactly when the end to the bear market will come. What we can know is that stocks are a better deal today than they were a year ago, and that means future potential returns are higher.

I keep coming back to the nearly complete absence of bulls right now, and the words of Warren Buffett pop into my mind: “Be fearful when others are greedy and greedy when others are fearful.”

Stated slightly differently, in the 1930s, investor Bernard Baruch was asked how he made so much money in the stock market. His response was delightful. “I try to be accommodating. When everyone wants to buy, I sell. When everyone wants to sell, I buy.”


Hal Masover is a Chartered Retirement Planning Counselor and a registered representative. His firm, Investment Insights, Inc is at 508 N 2nd Street, Suite 203, Fairfield, IA 52556. Securities offered through, Cambridge Investment Research, Inc, a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Investment Insights, Inc & Cambridge are not affiliated. Comments and questions can be sent to These are the opinions of Hal Masover and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal. Past performance is no guarantee of future results.

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