5 tips for getting out of a pessimistic market this holiday season

The market doesn't look set to skyrocket anytime soon. In the meantime, grow your network and position your portfolio to take advantage of a future rally.

The forecast is driven by deteriorating structural fundamentals. For example, credit card debt has even surpassed 2020 levels, with interest rates charged by banks barely higher than those seen before the post-2000 dot-com crash. And yet, labor force participation rates – or the proportion of the population able and working – have still not returned to pre-pandemic levels. In addition, inflation, as measured by the consumer price index, has increased in recent years.

Economic forecasts suggest that we expect greater economic turbulence. The United States is in recession and this recession is expected to continue, with the Conference Board forecasting a further decline in gross domestic product (GDP) of 0.5% in the fourth quarter of this year. It also predicts that the recession will continue at least until the second quarter of 2023. This was before the collapse of the FTX crypto trading platform, which had profound downstream effects on investment portfolios and businesses. not crypto. Other more optimistic forecasts, such as those from the Federal Reserve Bank of Philadelphia and S&P Global, are barely positive for 2023 at 0.7% and 0.2%, respectively.

Consumer debt and interest rates in the United States, 1995-2020. Source: St. Louis Federal Reserve

Participation in the labor market in the United States, 1950-2020. Source: United States Bureau of Labor Statistics