Checking In On the Predictions about 2023

“Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.”

–Lao Tzu

In the pursuit toward consistently managing risk in ever-changing markets, we find it necessary to challenge commonly held investing beliefs, especially when it pertains to predictions. 

The S&P 500 is within striking distance of its all-time high and has had a strong performance in the first half of the year. Conversely, so-called “market experts” have not had such a great start to the year. The average forecast from these predictors actually suggested a decrease in the S&P 500 this year. This was the first time since at least 1999 that the aggregate prediction has been negative. Yet, the S&P 500 is on track to have its fifth-best start to the year since 1990.

It’s important to note that six months remain in 2023. To avoid seeming hypocritical, we are not predicting that these predictions will prove false; they could turn out to be correct. Our intention is to highlight the potential negative effects of mindlessly following the predictions of so-called experts.

In this Monthly Note, we delve into some 2023 predictions and assess how they have performed year to date. We also explore how stock prices often anticipate news and the price’s connection to the rise of certain stocks that have been mostly driving the overall indexes this year.

Below are the asset classes utilized in our portfolios and their model-driven exposure heading into July.

Disclaimer: This note is for general update purposes related to the general strategy and approach of Spartan Planning portfolios. Every client’s situation including Risk Profile, Time Horizon, Contributions, and Distributions is different from other clients. Your exposure to any given asset class will depend on your goals, risk profile, and how tactical or static your risk profile calls for. Adjustments can vary across strategies depending on each strategy’s objectives. What’s illustrated above most clearly reflects allocation adjustments for the Growth Strategy. If there have been changes to your risk profile and/or goals or if you wish to discuss them in more depth, please contact your advisor.


Equities & Real Estate

A theme of recent Asset-Level Overviews has been tight ranges of equities with higher lows. It’s a similar story again this month. Equity markets produced broad gains in June, and leading U.S. and foreign developed markets experienced solid breakouts to strengthen previous uptrends. Technology and growth continue to lead, but almost all segments joined the party. Value and dividend stocks, which have lagged significantly in 2023, produced intermediate-term uptrends. Likewise, small- and mid-cap stocks created uptrends across the shorter-term timeframe.

Foreign-developed equities made a new one-year high and remained firmly trenched in uptrend territory. Notably, emerging markets regained some strength and are able to take on the exposure that had been vacated for much of 2023. It is impossible to know what happens next, but for market bulls, the hope is that additional returns will be created by previously weaker assets catching up to their stronger counterparts on the equity side. 

Real estate securities continue to experience downtrends across both timeframes. As a result, all our portfolios will remain at their minimum allocation.

Fixed Income & Alternatives

Fixed income of almost any duration remained weak across the board. U.S., inflation-protected, and international were all in downtrends. As a result, our portfolios will remain at their minimum allocations. Adding insult to injury is that yields remain lower than their very short-term counterparts. 

Fortunately, yields continue to be favorable compared to recent history for Treasuries with less than a year duration. As of the time of this note, a six-month Treasury is providing an approximate 5.5% yield. Consequently, the primary source of bond exposure in our portfolios will continue to come from this segment.

Gold retraced further in June and is now experiencing a downtrend over the intermediate-term timeframe. As a result, gold will now be underweight in our portfolios.

Sourcing for this section:, Nasdaq Composite ($NASX), 1/1/2023 to 6/29/2023;, Growth ETF Vanguard (VUG), 1/1/2023 to 6/29/2023;, Value ETF Vanguard (VTV), 1/1/2023 to 6/29/2023;, High Dividend Yield Vanguard ETF (VYM), 1/1/2023 to 6/29/2023;, FTSE Developed Markets Vanguard (VEA), 7/1/2022 to 6/29/2023; and, 6 Month Treasury Rate (I:6MTCMR), 6/29/2023

    Three potential catalysts for trend changes:


    • Student Loans:  The Supreme Court blocked the Biden administration’s plan to eliminate federal student debt for millions of borrowers. The forgiveness plan would have cleared an estimated $430 billion in loans from the government’s books. About 24.3 million borrowers, or 53% of the total, owe less than $20,000 and stood to have their debts erased.
    • Summer Relief:  It’s good news for wallets, as natural gas is starting the summer at less than half the price it was a year ago. Currently, natural gas hovers around $2.70 versus the $5-$7 range it was in last year, which should mean lower electricity bills for many American households when they crank up their air conditioners. Industrial companies, including makers of chemicals, cat litter, fertilizer, paper, wallboard, and steel, have told investors in the past few weeks that lower gas bills are easing cost pressures.
    • Home Prices Lower, But Mortgages Still Expensive: Home prices posted their first year-over-year price decline in 11 years. However, higher mortgage rates made home purchasing more expensive for buyers. Mortgage rates rose rapidly in 2022, which caused a slowdown in home sales as buyers backed away from the market. Higher mortgage rates also made homeowners reluctant to sell, reducing the housing supply.
    Sourcing for this section: The Wall Street Journal, “Who Could Be Left Behind in the Supreme Court’s Student-Loan Ruling, in Six Charts,” 6/29/2023; The Wall Street Journal, “Cheaper Natural-Gas Prices in Store This Summer,” 6/28/2023;, Natural Gas Futures, 1M, NYMEX” 1/1/2022 to 6/30/2023; and The Wall Street Journal, “U.S. Home Prices Posted First Annual Decline Since 2012 in April,” 6/27/2023


      1. We’ll still be in a bear market by year’s end
      2. The U.S. will fall into a recession in 2023
      3. The interest rate yield curve will reverse its inversion during the second half of the year
      4. The U.S. inflation rate ends the year far below expectations
      5. Healthcare will be the top-performing sector in 2023
      6. Gold-mining stocks will be among the best-performing industries
      7. Energy stocks will struggle following a strong year
      8. Apple will fall below $100
      9. Toyota will close out 2023 as the world’s largest automaker by market cap
      10. China stocks will vastly outperform U.S. stocks
      11. U.S. home prices fall as much as 20%
      12. A financial crisis will unfold

      –Sean Williams, The Motley Fool, 1/8/2023


      The good news about making 12 market predictions is that one is bound to be correct, right? In this case, energy stocks have indeed struggled (#7) year to date, so with half of the year left, that’s a pace of 8% accuracy. 

      At the end of March, we had some fun making a case for both a bull or bear run in equity markets. In the bull case, we wrote the following:

      “The fact that material bank issues have done little to alter this pattern of higher lows is arguably the strongest bull case of all. Investors are largely seeing this for what it is – a few banks paying the price for reckless decisions. Sadly, these types of situations have routinely existed and will likely continue.

      There’s a solid argument to make about markets having already priced in all the bear scenarios. With the worst seeming to be behind us regarding inflation, rate hikes, and banking issues, the markets may be slowly weeding out the remaining bears. In the absence of selling, markets naturally tend to climb. If we’re about to climb, you want to already be on board or get on board quickly.”

      In last month’s update, we highlighted the fact that only a handful of stocks were driving the major equity indices higher. In our view, a bifurcation like this isn’t that uncommon. We find that, in time, either the leaders tend to fall back to earth or the others start to catch up. Based on performance through June, it appears the latter is the case.


      One of the tenets of trend following is that focusing on price tends to put you in a relatively good position. History has shown the price of a stock reflects nearly all relevant information to investors, which means it may provide valuable information for those who can exploit it with robust systematic investing rules. The process need not be complicated. One could argue that simplicity leads to robustness across many different market environments. 

      We believe and have observed that price movements tend to look like they predicted the news. As trend followers, we make allocation changes based on a rules-based process, not because we know or guess the underlying “why.” At times we have experienced a trend change that dictated a portfolio shift and only later started seeing headlines giving an explanation for why the prices were trending in that direction. We don’t typically read headlines and then see a trend change; rather, headlines tend to confirm what the market has already experienced.  

      A great example of this is the current uptrend in U.S. stocks. Trend-following strategies are capable of embracing the uptrend in an unbiased way. Our repeatable, systematic process has pushed our portfolios toward some of the best-performing stocks in the S&P 500 year to date. This happened without knowing (or even acknowledging) the explanation. In some cases, it is only now that the news, or the “why,” is catching up and becoming more apparent. 

      As is represented in our opening quote to this section, predictions about recession in 2023 have been repeatedly foisted on investors. At one point this year, the market had priced in multiple near-term interest rate cuts. With a strong economy continuing, recession predictions are now being postponed to 2024, with little sign of rate cuts. 

      Heading into 2023, following the “expert” predictions would have kept you out of much of the market rally to this point in the year. For many investors, these predictions are their guiding light and voice of reason. Sadly, it doesn’t always lead them down a smooth path. We are thankful to have a risk management process that does not rely on our ability to predict the future. You can be sure we will always be objective and disciplined and will follow the data rather than flawed opinions and predictions. We will act on the confirmed reality of the market and leave our predictions for the weather.


      The Spartan Team

      Sourcing in this section:, “12 Stock Market Predictions for 2023,” 1/8/2023 and, “Forget rate hikes, these analysts are predicting interest rate cuts next year,” 7/1/2022
      Disclaimer: this note is for general update purposes related to the strategy and approach of Spartan Planning portfolios. Every client’s situation including Risk Profile, Time Horizon, Contributions, and Distributions is different from other clients. Your particular exposure to any given asset class will depend on your goals, risk profile, and how tactical or passive your risk profile calls for. If there have been changes to your risk profile and/or goals or if you wish to discuss them in more depth please contact your advisor. This email and the data herein is not a solicitation to invest in any investment product nor is it intended to provide investment advice. It is intended for information purposes only and should be used by investment professionals and investors who are knowledgeable of the risks involved. No representation is made that any investment will or is likely to achieve results comparable to those shown or will make any profit at all or will be able to avoid incurring substantial losses. While every effort has been made to provide data from sources considered to be reliable, no guarantee of accuracy is given. Historical data are presented for informational purposes only. Investment programs described herein contain significant risks. A secondary market may not exist or develop for some investments portrayed. Past performance is not indicative of future performance. Investment decisions should be made based on the investors specific financial needs and objectives, goals, time horizon, tax liability, risk tolerance and other relevant factors. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Investors should consider the underlying funds’ investment objectives, risks, charges and expenses carefully before investing. The Advisor’s ADV, which contains this and other important information, should be read carefully before investing. ETFs trade like stocks and may trade for less than their net asset value. Spartan Planning Group, LLC (“Spartan” or the “Advisor”) is registered as an investment adviser with the United States Securities and Exchange Commission (SEC). Registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the Adviser has attained a particular level of skill or ability. Indexes are unmanaged and do not incur management fees, costs, and expenses. Spartan’s risk-management process includes an effort to monitor and manage risk, but should not be confused with and does not imply low risk or the ability to control risk. There are risks associated with any investment approach, and Spartan strategies have their own set of risks to be aware of. First, there are the risks associated with the long-term strategic holdings for each of the strategies. The more aggressive the Spartan strategy selected, the more likely the strategy will contain larger weights in riskier asset classes, such as equities. Second, there are distinct risks associated with Spartan Strategies’ shorter-term tactical allocations, which can result in more concentration towards a certain asset class or classes. This introduces the risk that Spartan could be on the wrong side of a tactical overweight, thus resulting in a drag on overall performance or loss of principal. International investments may involve additional risks, which could include differences in financial accounting standards, currency fluctuations, political instability, foreign taxes and regulations, and the potential for illiquid markets. Investing in emerging markets may accentuate these risks. Diversification strategies do not ensure a profit and do not protect against losses in declining markets