2023 Annual Client Letter

January 17, 2023

It has been three years since the sun set on the second decade of the 21st century, though to many it may feel more like thirty. I will try to refrain from boring you with a long recitation of the events of the last three years, but I ask you humor me for a moment:

  • 2020: the year of the virus & global lockdowns. S&P 500 lost 34% in just 33 days, its fastest decline of such magnitude [i]


  • 2021: the year everyone seemed to get rich. Millionaires were minted left and right buying things like cryptocurrencies, meme stocks, seemingly any stock even tangentially associated with the tech sector, SPACs, real estate, and digital pictures of rocks (one sold for $1,300,000.[ii] A digital picture of a rock. Seriously).


  • 2022: the year everyone was reminded it’s harder to stay rich than it is to get rich. Every asset mentioned above plummeted in value. Bitcoin down 65%,[iii] Ethereum down 68%,[iv] NASDAQ (tech stock index) down 32.5%,[v] quintessential meme stocks GameStop and AMC down 50% and 85%,[vi] respectively, NFTs down… I don’t know? Are any of them worth anything anymore?


  • Inflation roared in 2022 for the first time since the 1970s, peaking at 9%.[vii] It's difficult to remember what life was like 50 years ago, so we all discovered reading about inflation in a textbook and experiencing it at the grocery store are different things. The latter is far less pleasant.


  • There was plenty of fearmongering about (a) oil prices, which spiked after the war in Ukraine kicked off (the price of oil is back to where it was at the beginning of 2022 by the way), (b) supply chains (container shipping costs are back to pre-pandemic levels),[viii] and (c) food shortages (there were a few times I encountered some minor supply issues at the grocery store…)


  • The secular downtrend in interest rates since the Volcker years of the 1980s abruptly reversed in 2022. Money became substantially more expensive, sending shockwaves through the economy. Particularly the bond market, where the Bloomberg Aggregate (the proxy index for US bonds - often considered the “safe” segment of an investor’s portfolio) was down 13%.[ix]


  • Hot war in Europe involving a nuclear power. Lovely.


  • Presidential election of 2020. I’m going to refrain from saying anything more about politics.


  • Midterms of 2022. I lied, that’s the last thing I’ll say about politics.


  • A general undercurrent of societal dissatisfaction that began in March of 2020 and has steadily waxed even as the pandemic waned. It is difficult to describe, but I suspect you feel what I’m talking about here. It is not a good feeling.

In the preceding bullet points, I have mentioned the returns for the S&P 500 index, the Bloomberg Aggregate, and the NASDAQ. My compliance department would like me to remind you that you cannot invest directly in these indices, and any investor will incur trading costs, fees, etc. I have also mentioned a few cryptocurrencies and individual stocks, and this should not be construed as an inducement to buy, sell, hold or do whatever else one might do with an individual stock or cryptocurrency.

So, it’s been a three-year emotional beatdown for many. And a beatdown of their stock portfolios.  Well, perhaps not so much? From the dawn of the 2020s to the end of 2022, the S&P 500 index returned…


That seems… not so bad? The index was up 18.4% in 2020 despite that nasty 34% decline in the first quarter, then up again 28.71% in 2021 before a decline of 19.44% in 2022.[xi] Sure, it doesn’t feel like the equity markets returned an average of 7.66% annually over the last three years. But that is what they did.

My wife is a therapist. She’s all about how things feel. Leaning into your feelings is great in therapy. But it’s horrible in investing. No one feels good looking back at the market tumult of the last three years. Though I suspect if, on January 1st of 2020, you were told by a time traveler the S&P 500 index would average roughly seven and a half percent over the next three years, you would probably shrug your shoulders, say something like “good, not great,” and promptly forget all about the markets and your portfolio.

That is why Warren Buffet said the most important quality in an investor is temperament rather than intellect, and Peter Lynch said the real key to making money in stocks is not getting scared out of them.

Given all the negativity in the press about recessions and inflation and interest rates and everything else, we wish to offer two additional data points…

The first is the number of times the market has had consecutive down years in the postwar (WWII) period:

Three times.

The market was down in 1974 following a down year in 1973 as well as 2001 and 2002 following a down year in 2000.[xii]

The second is this lovely chart from Dimensional Fund Advisors:[xiii]


The market suffered a 20+% decline in 2022, so the middle three bars above are the operative data points. Does it guarantee it will be a positive year in 2023? Certainly not. But history says the odds are in your favor.

The financial media remains undeterred. Headlines continue screaming reasons to be concerned about your portfolio. The talking point du jour is whether the Fed will engineer a recession in its efforts to cool inflation. How many more times will the Fed hike rates? What is the terminal rate? How will the war in Ukraine resolve? How will all this affect equity prices? The answers to these questions are unknowable, and it is impossible to execute an investment policy based on that which is unknowable.

But the last three years remind us the unknowable ought not get in the way of successful investing.

We hope this lesson is remembered in 2023.

Sean Cawley, CFP®


Neither asset allocation nor diversification guarantee against investment loss. All investments and investment strategies involve risk, including loss of principal.

Content here is for illustrative and educational purposes only. It is not legal, tax, or individualized financial advice; nor is it a recommendation to buy, sell, or hold any specific security, or engage in any specific trading strategy. Results will vary. Past performance is no indication of future results or success. Market conditions change continuously.

This commentary reflects the personal opinions, viewpoints, and analyses of Resolute Wealth Management. It does not necessarily represent those of RFG Advisory, clients, or employees. This commentary should be regarded as a description of advisory services provided by Resolute Wealth Management or RFG Advisory, or performance returns of any client. The views reflected in the commentary are subject to change at any time without notice.






[vi] YCharts, GME & AMC Total Return Fundamental Chart, 12/31/2021 – 12/31/2022



[ix] YCharts, Bloomberg US Aggregate Total Return Fundamental Chart, 12/31/2021 – 12/31/2022.

[x] YCharts, SPX Total Return Fundamental Chart, 12/31/2019 – 12/31/202