January markets brought a nice return for investors. The major stock indices returned an average of 4.7% for the month. Bonds rose 2.7%. From a year ago, returns are still negative with major stock indices down -6% and bonds -8.5%.
As we experienced last year, both bonds and stocks suffer in inflationary times. It takes a long time to bring inflation under control, usually years. Not all stocks have suffered equally, with small company stocks, utilities, commodities, and international stocks offering some real diversity to the major U.S. indices. The coming year looks more volatile than usual due to a general expectation that inflation will tip to recession. So far a mild recession is priced into stocks and bonds. The economic slowdown may not happen until the middle quarters of the year and markets may recover by year end. 2024 looks better for stocks and bonds at this time.
Preparing for 2022 income tax reports: TD Ameritrade has mailed 1099-R reports regarding any 2022 withdrawals from IRA accounts. By mid-February, TD Ameritrade dividend and cap gain 1099 reports for non-IRA accounts, including cost basis data, will be available online and mailed to you. If you need a copy of any TDA report, our office is happy to retrieve it online and mail/secure email/fax it to you or your tax preparer.
We got off easy this January, weatherwise. Now bracing for a cold and snowy February that seems due to the northeast, it’s time to make the best of the remaining winter before counting the worst over. Call it progress. The reliable return of the sun is a comfort in these late winter months. Something dependable whatever the weather inflicts on us.