Things Are Looking Up for 2023

Things Are Looking Up for 2023

Everybody is bracing for a recession...

The nation's foremost economists, our Wall Street experts, and mom-and-pop investors are all expecting the worst.

It's not hard to understand why these fears exist. And, despite falling slightly, inflation has been too high for too long. As a result, the Federal Reserve has no plans to slow its interest-rate hikes anytime soon. The Fed uses higher interest rates specifically to slow the economy.

But we started digging into numbers like rent, housing, and gasoline prices and it's clear that further declines in inflation are ahead.

Now, that does not mean we won't see inflation rates of 4% or 5% for years going forward. We think we'll still struggle with inflation for years to come.

But if inflation has peaked, that's a big sign. A century of data suggests that when inflation peaks, stocks rise.

Inflation doesn't have to drop to a specific level or get "under control." But once you pass the highest point of inflation, stocks can rise again. So things are already looking up for stocks this year.

We're not the only ones seeing positive signs...

Our colleague Greg Diamond is bullish.

Specifically, he's predicting that a rare event is coming to the markets this year, which has occurred just three times in 25 years. It can lead to a huge moneymaking opportunity.

If you missed Greg's "Get Out of Cash" event, you can catch all the details – for a limited time – right here.

Here's to our health, wealth, and a great retirement,

Dr. David Eifrig and the Health & Wealth Bulletin Research Team
January 21, 2023

Reader question of the week...

Q: Doc, why have cars gotten so expensive? Everything I look at is more than [$30,000]. Even used cars cost a fortune. Any tips? – H.M.

A: Longtime readers know I don't recommend spending too much on a car. Unless cars bring particular joy to your life, set your money aside for a more comfortable retirement... or at least for a splurge that means more to you personally. For example, I drove an old Hyundai for years because I care more about travel and fine dining than having the newest, fanciest car.

Fortunately, a managing editor on my team, Brady Holt, has a side job testing and reviewing dozens of cars every year. I'll turn this question over to him...

H.M., you're exactly right that car prices have gone up. When Doc bought that Hyundai Santa Fe SUV 20 years ago, the starting price was just $17,549. Now, it's $28,200. And many dealers will mark that price up even higher, as it sounds like you've seen.

There are two reasons cars got so expensive. One is something you've heard Doc talk about in lots of other contexts: inflation and supply-chain disruptions.

Not only have prices for everything gone up, but it's especially hard for carmakers to get enough computer chips and other components. That led to a shortage of new cars, so more people turned to used cars... pushing their prices up. While used-car prices are finally starting to fall, the shortage turned the old-fashioned advice on its head: Some new cars actually cost less than their used-car equivalents. That's because the used cars were sitting right there on the lot, while the new cars were backordered.

The other reason is that cars have gotten more advanced. People have demanded higher levels of everything from technology and luxury amenities to speed, interior finishes, safety, and suspension engineering. This all costs money.

Now, there are still some great cars out there for much less than $30,000. You'll just have to choose something to sacrifice. For example, the Kia Soul is a mini SUV alternative that packs in a ton of room for its size, yet still has a starting price below $20,000. You just have to be a little patient with its 147-horsepower engine.

Or the latest Honda Civic compact car (priced from $25,050) has the slick handling and high-end interior finishes of a luxury sports sedan, plus a big adult-friendly backseat. But you'd have to accept feeling cozy in the driver's seat instead of spreading yourself out like in a bigger car.

And if you do crave that bigger-car feel, the midsize Toyota Camry sedan still starts at $25,945. To stay under $30,000, though, you have to make do with cloth seats instead of leather, a four-cylinder engine instead of a V6, and sunlight coming in through the windows instead of a sunroof.

You might decide it's better for you to spend more to get a car that makes you happier. But if you'd rather have more money in your pocket than a fancier car in your driveway, these are just three of the ways you can still get comfortable, useful transportation – without going too wild with your spending.

Keep sending your questions, comments, and suggestions our way. We read every e-mail... feedback@healthandwealthbulletin.com.