2023 in review

28th Dec '23 by Megan Boxall

16 comments 2057 reads

How many days before/after ‘The Big Day’ is it appropriate to wish someone a Happy Christmas? This article has the misfortune of being both too early and too late. It’s being written on 21 December, but will be published on 28 - such is the way with publishing deadlines around the festive season. Regardless, I hope you are all having a wonderful time celebrating.

Something I am already celebrating at the time of writing is the solstice. We’ve finally made it the shortest day of the year. Where I am writing from, the sun ‘rose’ (if it’s there behind the clouds) at 08:06 and will have set by 15.54. Bleak. But today marks a very welcome turning point. Spirits will soon be lifted by Christmas and New Year and then we’ll be back on the road to longer days.

This restrained optimism is being reflected in the markets as we close out 2023. Last week (or two weeks ago by the time you read this), the chairman of the Federal Reserve suggested that there might be as many as four interest rate cuts in the US in 2024, perhaps signalling the end of a very challenging economic period which has been felt by private investors.

But before we turn our attention to the opportunities of the new year, the post-Christmas stupor is a fun time of year to sit and remember. And with that in mind we’ll be bringing you a pair of articles to help prompt recollection of 2023. Tomorrow we will be digging through the statistics and data - helping you remember the stocks, sectors and markets that thrived and those that didn’t. But first, we’ll turn our attention to the stories and events that defined 2023 and the lessons we can take from them.

A banking crisis that wasn’t

It has been 15 years since the last time major bank failures prompted global meltdown and March proved it was just about time for another go.

As many had expected, rising interest rates (enforced by central banks around the world in an attempt to quell rampant inflation) finally caused trouble for the banking sector, starting with Credit Suisse, which collapsed in the middle of March.

Then came the turn of the US banking sector, which was undermined by the fall in bond prices as interest rates continued to rise. With customers queuing (digitally) to take their cash out,…

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Rusty2

28th Dec '23

Hello Megan, I don't understand your comment "Meanwhile Microsoft, which in January, threw more of its weight behind OpenAI, has climbed to even greater heights."

You make it sound like Microsoft (NSQ:MSFT) 55%, has gone up more than NVIDIA (NSQ:NVDA) 220%, which is clearly not the case. Meta Platforms (NSQ:META) has gone up quite a bit more, 172%.

snowdrop

29th Dec '23

I believe MB is referring to the historic price of MSFT. The review is excellent overall.

Martin VT

30th Dec '23

What an incredibly volatile and disruptive time we have had in the U.K. these last four years, since early 2020: COVID, Brexit introduction, energy and food price inflation spike, shipping costs crisis, Government Net Zero demands / regulations / restrictions, 3 Prime Ministers, NHS 7-8m waiting lists, public service strikes, and high tax, Government spending, and debt.

Imagine how the U.K. economic and investment outlook might appear if the next four years had a largely benign or even positive feel. Nothing lasts for ever, good or bad, so here’s hoping for a more positive 2024 and beyond!

Meldrew

The message I take from this article is that since Brexit the British economy and the UK stock market have become something of a basket case.

I’ve had mixed fortunes that include a spectacular disaster with one micro cap falling to zero and another showing little sign of fulfilling its promise. Fortunately, the rest of my portfolio has performed better, with a couple of single baggers.

My better performers have been US companies and UK registered companies that do most or all their business outside the UK.

I’m pondering investing a lot more outside the UK.

BnB

Do it. I’m up 5% in UK this year, 27% in Europe and 30% in both USA and Japan. Stronger economies, far more liquidity and much better companies. When people’s top 5 stocks are vape pedlars, budget kitchenware distributors and photo booth operators, you know there’s something seriously wrong with the index.

MGinvestor

31st Dec '23

That's very impressive BnB. I've always thought about investing globally but get stuck with the following so let me try. Can I ask, which broker(s) you are using to access Europe, US and Japan markets? And more importantly how are you dealing with tax implications for trading in those countries? Vast majority of my investing is through ISA accounts hence the question.

Many thanks and hope you have a prosperous 2024!

I tend to agree, my US folio is up 47% in 2023, mostly Technology and some Uranium stocks. However many are looking overvalued now and I doubt 2024 will repeat the 2023 performance. If there is a correction I will buying more in the US.

Can I ask, which broker(s) you are using to access Europe, US and Japan markets? And more importantly how are you dealing with tax implications for trading in those countries?

First of all, there’s nothing stopping you investing overseas via your ISA and directly in individual stocks. HL for one has this facility. However, I think they force you to convert back to GBP when you sell a US stock so there is the attrition of currency conversion charges. What you ultimately need is a multi-currency account. If you can find a similar online broker that provides this facility you’ll be well on your way.

I use a large Swiss bank and have trading accounts in most of the major currencies and they offer an ISA platform via an arrangement with, I think, Lloyds bank. They also make all my tax arrangements. This all comes with a hefty fee but it also opens up new avenues, like options trading - I buy and hold my stocks in the main but I do a lot of options trading. And the profits from that (usually) do much more than cover the fees for the overall service. This would be overkill for most users but you never know where the investing journey may take you.

Software and cybersecurity look toppy, don’t they? But they have for most of the year and yet kept on surging higher. I feel the run is near its conclusion but I expect a rotation rather than a lengthy fall from current levels of the index overall. In preparation, I’ve sold unambitiously OTM calls (5%-10% higher) on all my tech names, so if they get even more expensive, they’ll be called away and I will rotate the proceeds into other parts of the market or GARP-y tech like (some) semis, Oracle and SAP or perhaps cheap UK options like Auction Technology (LON:ATG) or Journeo (LON:JNEO). Of course, if they consolidate or drop from here, I keep the option premium and review my choices.

They look toppy now, but if you look at the prices a year ago, they were far lower, I did top up Apple (NSQ:AAPL) and Alphabet (NSQ:GOOG) when they did fall back. I did sell out too early on Adobe (NSQ:ADBE) and NVIDIA (NSQ:NVDA). I can see why NVDA is doing so well, this AI software, needs far more memory, many people will be upgrading their computers, especially the graphics cards and NVDA is the brand in demand. Graphics cards are so expensive now, partly due to crypto mining, I just paid £300 for one, which is considered fairly budget.

I have found buying the large US companies on pullbacks has worked well. I would ignore the Stockranks on these, they tend to follow the share price. I will be top slicing some soon, if they go up more.

I do hold Journeo (LON:JNEO), only a small holding, one that zoomed up before l could top up.

john2

The reason why NVDA has shot up to suddenly is that its GPUs allow a form of parallel processing which is useful in AI, the tech trend of the moment.

I did sell out too early on Adobe (NSQ:ADBE) and NVIDIA (NSQ:NVDA).

This is why I sell calls on long term winners rather than selling out. Not foolproof but it works well enough for me

Nothingventured

1st Jan

I've lost count of the number of UK managers who say the UK market is cheap. In my experience it's always cheap - although I'm referring to the FT100 share index - not the smaller stuff.

I think its well worth diversifying and investment trusts are a great way to get international exposure. My largest holding is the biggest UK company (FT100 constituent) you've never hear of; Pershing Square Holdings (LON:PSH) . Well worth a look for exposure to the US market and the US$ and it generally avoids the very expensive US tech' sector.

Jim

Not long term winners. NVIDIA (NSQ:NVDA) I only bought last year. Adobe (NSQ:ADBE) I held for about 3 years but it has been a roller coaster, a lot of the time it was a loser.

I don't understand calls.

BenHazz

I agree on cyber security, I've sold Crowdstrike Holdings (NSQ:CRWD) , simply because I think it's due a pullback after a huge run up. Was comfortably my best share of the year in percentage terms.

2nd Jan

I sold Palo Alto Networks (NSQ:PANW) in November because of a forecast cut but then the shares went up 25%, difficult to make sense of the market sometimes. I missed Crowdstrike Holdings (NSQ:CRWD).

2023 in review

A banking crisis that wasn’t

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Megan Boxall

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