2023 Stock Market Rollercoaster: Hits, Misses, and Lessons Learned

Josh Enomoto

Tue, Dec 26, 2023, 7:11 PM 4 min read

With another year about to enter the books, it’s time to consider a broad stock market review. Sure, as various positive-thinking gurus may assert, you’ve got to look forward. However, assessing what went right – and of course what fell short of the mark – could be crucial in deciphering future strategies.

For the wild year in stocks, new paradigms may have forged. One critical lesson may be that while it’s important to acknowledge historical trends, some elements may change permanently due to the proliferation of fresh mores. Understanding such trends may help decipher forward opportunities.

Also, a related takeaway from this stock market recap is that investors will need to practice agility. Given the dynamism that we’ve witnessed, it may be imprudent to just stick with preconceived notions. Rather, we’ve got to follow the data and the evidence, however counterintuitive they may appear.

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On that note, let’s take a journey together on this stock market review.

The Tech Rebound

A hexagonal grid with different tech-related icons; Tech stocks illustration. Best Tech stocks

Source: whiteMocca / Shutterstock

Based on the negative trajectory of the innovation industry benchmark Technology Select Sector SPDR Fund (NYSEARCA:XLK), the much-watched gauge suffered a devastating blow in 2022. So, it wasn’t unreasonable to assume that more negativity was on the way. After all, the Federal Reserve made it clear that it prioritized controlling runaway inflation practically above all else.

However, the pessimists didn’t have an opportunity to force everyone to wallow in their misery. Instead, the tech sector made a remarkable recovery. In doing so, the ecosystem arguably represents the biggest takeaway regarding any stock market review of 2023. Essentially, we’re living in the information age. And anything that advances the directive has at least a chance of upside.

When discussing the year in stocks, it’s impossible not to mention Nvidia (NASDAQ:NVDA). Yeah, it might be priced into the heavens based on traditional valuation metrics. But because the enterprise undergirds various advancements such as generative artificial intelligence, it appears there’s no stopping NVDA.

For me, the takeaway in this stock market recap is that when you’re evaluating truly innovative products, “regular” metrics might not cut it.

Doom and Bloom?

An American flag is seen waving outside the window of a building.

Source: LIDERO / Shutterstock.com

Peruse market analyses and you won’t spend too much time until you come across doom-and-gloom narratives. You know what I’m talking about. “They” are coming for your gold, your guns, and your freedom. Therefore, the solution is to buy more gold and more guns. Because when the fiat paradigm collapses – along with an EMP strike – gold, not crypto, will be the only monetary standard.

Unfortunately for those who were either vested heavily in the doom and gloom or took bearish positions against the broader equities market, none of the bad news stuck. And if there was a time for bad news to stick, it arguably would have been 2023. After all, earlier in March, anxieties spiked due to the regional banking crisis. However, authorities managed to get in front of the problem.

To be fair, we shouldn’t completely dismiss the threat that the crisis has presented. Significant risks remain, as a November article by The Hill suggested. Still, when it comes to the misses regarding this stock market review, strong pessimism was certainly one of them.

Maybe Warren Buffett was right all along: you shouldn’t bet against America.

Demography is Destiny

Crypto coins on a phone screen showing stats for various cryptocurrencies.. Cryptos to Buy Before the Market Swing. rising meme cryptos

Source: Chinnapong / Shutterstock

One tech-related sector that may have caught many investors – particularly from older age groups – by surprise is the cryptocurrency ecosystem. Let’s face it. Even for those familiar with blockchain-derived assets, the category almost sounds like voodoo magic. Nevertheless, the sector enjoys robust support, which then begs the question: why?

In my opinion, demography is destiny. Back during the 1980s and 1990s – when baby boomers began enjoying their peak earning years – the equities market soared. Of course, much if not most of this catalyst centered on mathematical realities. You have a lot of people with a lot of money all betting on stocks. You can bet that Wall Street will rise.

However, moving forward, young people – especially Generation Z – will likely catapult cryptocurrencies. It’s what they know. We’re talking about the first generation that practically has zero recollection of analog paradigms. It’s only logical that this cohort gravitates toward decentralized digital assets.

So, if you’re wondering whether cryptos will rise over the long run, my guess is yes, they will. It’s what young folks are betting. If there’s any one takeaway from this stock market review, it’s that demographics matter.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.