Vanguard Economic and Market Outlook for 2023

[WhatsHisNuts]

https://institutional.vanguard.com/...venmo-outlook-2023-beating-back-inflation.pdf

• 90% chance of a global recession in 2023
• Real Estate and Tech sectors likely hit hardest with layoffs
• Inflation will recede and likely will be back to ~2% in 2024 and 2025
• Bond rates should increase and the expected rate of return over the next decade is 4-5 %
• Equity valuations are getting closer to "normal" which should make for a good buying opportunity
• The return of the 60/40 balanced portfolio is here
• The corporate winners will be those that can maintain their profit margins during the expected recession and inflation reduction

 

[WhatsHisNuts]

If there is going to be a recession and/or equity valuations are going to remain stagnant, seems like investing in dividend paying equities would be the way to go. If the price isn't going to go up any time soon, trying to accumulate shares via reinvested dividends seems like a solid strategy.

 

[MadJack]

If you want a dividend stock check on EPD. Paying nearly 8% and has been paying for over 20 years, upping it's dividend along the way.

It was recommended to me recently and I have enough money in stocks for right now, so I did not buy. Yet.

 

[WhatsHisNuts]

If you want a dividend stock check on EPD. Paying nearly 8% and has been paying for over 20 years, upping it's dividend along the way.

It was recommended to me recently and I have enough money in stocks for right now, so I did not buy. Yet.

Looks like a good option for a retirement portfolio seeking dividends but doesn't fit what I look for. Stock price growth isn't there and they have a very high payout ratio (78%), and it also looks like it's not a qualified dividend so you'll have to pay normal income tax on it instead of the capital gains rate.

 

[WhatsHisNuts]

If you want a dividend stock check on EPD. Paying nearly 8% and has been paying for over 20 years, upping it's dividend along the way.

It was recommended to me recently and I have enough money in stocks for right now, so I did not buy. Yet.

Reading back through this thread I saw this and thought I'd chime in with this: One of the dividend investors I follow is investing in EPD. This particular guy is very conservative on his selections but mentioned this was a more aggressive than usual play as he looked for a high yield option to balance out his portfolio.

 

[WhatsHisNuts]

https://institutional.vanguard.com/...venmo-outlook-2023-beating-back-inflation.pdf

• 90% chance of a global recession in 2023
• Real Estate and Tech sectors likely hit hardest with layoffs
• Inflation will recede and likely will be back to ~2% in 2024 and 2025
• Bond rates should increase and the expected rate of return over the next decade is 4-5 %
• Equity valuations are getting closer to "normal" which should make for a good buying opportunity
• The return of the 60/40 balanced portfolio is here
• The corporate winners will be those that can maintain their profit margins during the expected recession and inflation reduction

My (off the cuff) recap of how their predictions fared

• The 10% chance hit. The US avoided a recession in 2023.
• The real estate and tech sectors were hit hardest but the layoffs were not what was expected. Many tech companies had layoffs but the job market is strong so the impact has been minor if at all
• Inflation is receding back to normal levels as predicted
• Bond rates are still in the toilet but are expected to increase over the next decade. High Yield Savings accounts have stepped in to offer the 4-5% they predicted
• Stocks surged at the end of 2023 making it a great year for equity investors
• The return of the 60/40 balanced portfolio is not here yet
• There was no recession and the US economy is hot, despite high prices being maintained for groceries and rent