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The stock market was on a wild ride last year due to the double whammy of skyrocketing inflation and the Fed’s interest rate hikes, coupled with geopolitical tensions. However, a series of recent positive economic data boosted investors’ confidence.
Inflation fell for the sixth consecutive month to 6.5% in December, bolstering hopes of a soft landing among investors and smaller interest rate hikes by the Federal Reserve going forward. Despite the steady waning, the central bank remains committed to bringing inflation down to its 2% target, implying more interest rate hikes this year.
Many economists believe the Fed’s aggressive regime has triggered a broader slowdown in the economy, predicting a 61% chance of a recession in 2023. This is expected to keep the stock market under pressure this year.
Irrespective of the market conditions, Exchange-Traded Funds (ETFs) can be useful for investors who are unsure of which individual stocks to buy, as they cover a basket of securities, thereby mitigating risk while enjoying broad upside opportunities at a low price.
Two ETFs that investors should keep an eye on in 2023 are the Health Care Select Sector SPDR Fund (XLV) and…
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