Stock market year 2023: Lessons for investors - expert analysis shows the most important findings.

Stock market year 2023: Lessons for investors - expert analysis shows the most important findings.

According to a report from www.focus.de, analysts expected a moderate profit for the stock market year 2023 - but they were completely wrong. Despite rising interest rates, geopolitical conflicts and looming debt crises, the markets showed massive growth. The market-wide US index S&P 500 rose by over 24 percent, and the German leading index DAX rose by 23 percent, which no one had expected.

Lesson number one: There are no reliable predictions
Analyst Larry Swedroe emphasizes that no one can consistently make reliable market predictions. Investors often succumb to their own “confirmation bias” and act on predictions that match their expectations rather than acting soberly.

Lesson number two: Tremendous growth cannot be sustained forever
Swedroe points out that companies with high valuations are increasingly finding it difficult to outperform the market over long periods of time. Abnormal high growth tends to revert to an average.

Lesson number three: Valuations don't help with market timing
Valuations are not suitable for timing markets. Although stocks began 2023 with high valuations, the strong year on the stock market showed that short-term trading based on valuation is not a reliable strategy.

Lesson number four: weak market phases require discipline
Investors must endure periods of poor performance that all risky investments experience.

Lesson number five: Don't let politics influence you
Investment decisions must not be influenced by political views. You express your political views through your choices, not through your investments.

Lesson number six: Great innovations are not necessarily good investments
The bankruptcy of some companies that were once considered pioneers of innovation shows that innovation alone is not enough to overcome economic problems.

These lessons from the past year have important implications for investors, who should be aware that reliable predictions and short-term trading based on valuations and political views are not an effective approach. Rather, a long-term strategy and the ability to endure weak market phases are crucial for a successful investment strategy.