What did 2023 tell us?

As we approach the end of the year and conclude our first year of 2DadsFinance we hope you have enjoyed the content we have put out. Moving into 2024, we’d love to hear more from you on topics to cover off on and what interests you in your financial journey. Also please share and like our articles as this helps with the algorithms on this platform. Thank you for your support! 

Sincerely,

~ 2Dads

TLDR: In 2023, key concerns included persistent inflation, Fed's impact on real estate, global conflicts, supply chain issues, rising energy costs, and cryptocurrency dynamics. Looking ahead to 2024, uncertainties remain regarding inflation, Fed policies, global conflicts, and the growth of cryptocurrencies. The approach is to stay diversified for long-term financial success, with a focus on sharing insights throughout the year.

When it comes to investing, we take a methodical approach to where we deploy our capital. We scan over the charts, across multiple time frames, evaluate levels to enter and exit, in addition to taking into account macro environmental factors that may weigh in on the direction the market may go. We don’t normally make quick decisions, but always look to pause and evaluate our financial strategy. Did anything fundamentally change over the past few months to change our approach to investing, especially as we move into 2024? Will the same strategies work from this past year? In 2023, these were the top 10 things that kept us up at night:

1. Inflation was and is still a major concern. Granted inflation is off its highs, however it’s still well above historical levels of 2-3%. 

2. The Fed raised rates to a level they were comfortable with to where they saw a noticeable slowdown. Looking ahead, they’ve signaled potential cuts, which has spurred home purchases that have been stalled for some time.

3. Wars. You saw Ukraine and Russia go at it. Recently Palestine and Israel are going at it. Rumors of Taiwan and China. Rumors of African countries looking to do the same. At the end of the day, expect volatility.If history has shown anything, there is a strong correlation between conflict and where the markets tend to go.

4. Does anyone make stuff besides China and India? We saw substantial easing of supply chain issues, but don’t forget how they became issues in the first place. Supply chain may continue to be a concern. We saw this during COVID, when a ship was stuck in the Suez Canal, and now with Houthi militants attacking in the Red Sea threatening global supply chains.

5. Energy is costing more. Whether you are using gas, oil or electricity – they’re all up significantly in 2023. 

6. US Dollar gained strength making investing in global markets a bit more difficult

7. Cryptocurrency saw significant inflows in Q4, and potentially is signaling something big. Crypto as we have seen has a tendency to run and run fast.

What to keep an eye out for in 2024

1. Inflation, is it over or just a minor pause? If you refer back to our inflation article, in order to make a profit on investments you must outpace inflation. If inflation is 4%, the risk free rate is 5% then you need to beat that for the added risk you’re taking on

2. Will the Fed’s printing press gain more ink and flood markets again?

3. More wars

4. Onshoring

5. How are economies outside of the US handling the same issues

There are a few major takeaways from the list above. Inflation is not gone, just because it’s not 7% anymore, it is still impacting all of us daily. 

There are 2 big themes for me which I am looking for in 2024. 

1. Does the fed ease monetary policy, if so – via what mechanism. Or will inflation continue to badger the American household leading to new rounds of rate increases to combat pestering inflation.

2. Will crypto finally take off? As an avid follower in the space, I think I am starting to see the beginnings of peer to peer activities via smart contracts taking shape. Will the looming ETF approval be a way for whales to dump their holdings or will this open the door to a new asset class? If inflation holds up and buying power continues to decrease then crypto might be the new safe haven.

None of us know what’s going to happen, however our plan as fathers is to be diversified and plan to set up our kids for financial success – not gamble away earnings. This is a long term game, and we intend to continue to share our thoughts in 2024.

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