Stocks finished the year far from where they started it. After hitting record highs in January, stocks exited December with a whimper, serving up their worst annual performance since the Great Financial Crisis year of 2008.
Markets are closed on Monday in observance of New Year's Day, and so volume was naturally razor-thin ahead of the long holiday weekend. As for those market participants who did stick around, plenty of them were willing to sell at lower and lower prices, perhaps partaking in some last-minute tax-loss harvesting.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The broad S&P 500 Index suffered the biggest decline of the main benchmarks today, shedding 0.3% to 3,839. The blue-chip Dow Jones Industrial Average gave back 0.2% to 33,147, while the tech-heavy Nasdaq Composite lost 0.1% to 10,466. For all of 2022, the Nasdaq finished down 33.1% on a price basis, the S&P 500 was off 19.4%, and the Dow shed 8.8% before dividends.
But stocks were by no means alone in having a miserable 2022. The bond market closed out the year with historic losses and cryptocurrencies crumbled. Bitcoin, for example, shed about two-thirds of its value in 2022. And although oil prices finished the year modestly higher, U.S. crude futures are still down roughly 35% from their June highs of more than $122 per barrel. On Friday, they settled at $80.26 a barrel.
Where to Find Quality Stocks in 2023
It's fair to say that investors had too much to contend with this year, including a Fed intent on whipping inflation with aggressive interest rate hikes and a slowing economy on the cusp of recession. These same concerns will continue to shape markets in the early going of 2023, with all the attendant headaches investors have come to know too well.
So what does this mean for investors in search of the best stocks to buy?
"A popular piece of advice among Wall Street strategists now is to resist the bargain-basement appeal of the most beaten-up stocks and focus instead on high-quality shares," writes Anne Kates Smith, executive editor of Kiplinger's Personal Finance.
High-quality value-oriented firms, like those found in the energy, financials and industrial sectors – and, yes, even some select small-cap stocks – stand out for their return potential in the new year. After all, 2022 has left us no shortage of market laggards set to generate outsized returns over the next 12 months.
-
Don't Let a "Clunker" Fund Drag Down Your 401(k)401(k) lineups are loaded with overpriced, underperforming fund options. Here's how you can dump the clunkers.
-
Do You Need Flood Insurance? I'm an Insurance Expert, and Here's Where You Can Get ItStandard homeowners insurance does not cover flood damage, so you might need separate flood insurance, which you can get either through FEMA or private companies. Here are the details.
-
Stock Market Today: S&P 500, Nasdaq Hit New Highs on Retail Sales RevivalStrong consumer spending and solid earnings for AI chipmaker Taiwan Semiconductor Manufacturing boosted the broad market.
-
If You'd Put $1,000 Into Berkshire Hathaway Stock 20 Years Ago, Here's What You'd Have TodayBerkshire Hathaway is a long-time market beater, but the easy money in BRK.B has already been made.
-
Stock Market Today: Powell Rumors Spark Volatile Day for StocksStocks sold off sharply intraday after multiple reports suggested President Trump is considering firing Fed Chair Jerome Powell.
-
Stock Market Today: Nasdaq Hits a New High as Nvidia SoarsA big day for Nvidia boosted the Nasdaq, but bank stocks created headwinds for the S&P 500.
-
Stock Market Today: Markets Chop Up More Trump ThreatsStocks are grinding to new highs on light summer volume, and bitcoin is only getting bigger.
-
If You'd Put $1,000 Into Procter & Gamble Stock 20 Years Ago, Here's What You'd Have TodayProcter & Gamble stock is a dependable dividend grower, but a disappointing long-term holding.
-
Stock Market Today: Stocks Slip Ahead of Big Earnings, Inflation WeekPerhaps uncertainty about tariffs, inflation, interest rates and economic growth can only be answered with earnings.
-
Stock Market Today: Solid Signals Lift Stocks Despite Tariff NoiseMarkets are whistling over the White House in an ongoing display of corporate America's enduring ability to survive and advance.
