How Belski Nailed the S&P 500 Call for 2023

Last night BMO’s Chief Strategist Brian Belski came by the Compound studio to talk about the year-end situation and lay out his case for 2024.

There were almost no Wall Street strategists predicting gains for 2023 a year ago. Here’s what their 2023 S&P 500 forecasts looked like last December, via Sam Ro:

The S&P 500 ended 2022 at 3839, so most of these calls were looking for a very mild bounce and some were predicting another down year.

It didn’t happen that way. As of this writing, the S&P 500 is up almost 20% year-to-date with just a couple of weeks left.

Here’s the S&P, Dow Jones and Nasdaq, in percentage terms year-to-date:

Belski’s target began the year at 4300 and then in June he raised it to 4550. We’re at 4594. They say “Close only counts in horseshoes and hand grenades” but I think you can add stock market outlooks to this list. Directionally, he had it right. Stuck to his guns during the mini-crisis in the banking system this spring and the renewed interest rate fears of the fall. It was quite a year for Brian and his team.

At my firm, we don’t invest based on price targets or make any forecasts of our own. But we do pay close attention to what intelligent people are saying and doing. We especially heed the type of intelligent people who admit when they’re wrong and are humble when they’re right.

There’s so much to learn from forecasts and how they go right and wrong each year. To deny being fascinated by this process is to declare yourself an unengaged investor. Earnings come from fundamentals. Those are important, but they’re only half the equation to determine the price of a stock or the level of an index. The other half is sentiment - opinion! To pretend opinions don’t matter to investing outcomes is not some sort of a badge of honor, it’s just irrational.

It was so much fun having Brian on again to talk us through what he’s expecting to see in the coming year. As always, he’s fun, self-effacing, smart and insightful.

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Have an awesome weekend! - Josh