so as we all know by now as investors 2022 was a crazier and in my personal portfolio
I made some good gains and some bad losses as well but overall we were able to squeeze out a
profit even during the biggest Market drop in 14 years so if you want to see our total share
price gains and losses and our passive income for 2022 feel free to check out these videos here on
the channel but in this video we're going to give a breakdown about what happened in the last year
as well as go through the five ETFs that we're going to be looking at and investing in during
2023 and exactly the reasons why we think there are good ETFs to invest in and by the end of the
video we'll be buying a couple of them live and in real time so let's get started don't wanna hold it
[Music]
Ah that's better okay so before we get to 2023 let's do a quick recap of 2022 there were five
major events that happened which affected our markets and those things were covered the war in
Ukraine High inflation Rising interest rates cost of living increases and a technical recession now
because of those six things the S P 500 which is often seen as the best Market indicator went down
19.4 percent in the year making it the worst year for the market since 2008 and the fourth worst
year since the index started 65 years ago simply put many economies were still facing difficulties
supply chain delays and inflation from the effects of the pandemic then in February Russia invaded
Ukraine and created a huge shortage of gas and energy which used to come from Russia but now
with sanctions was no longer available so Energy prices soared on high demand and low Supply those
two events cause inflation to run away with itself and CPI reached 8 9 and even over 10 percent in
some places in the world as they're not going to affect to the highest inflation for decades the
reserve banks worldwide started raising interest rates as a way to bring prices back under control
basically this creates pressure on households and reduces demand so prices come down so everyone
would have to pay more on their loans such as credit cards cars and home loans and the final
nail in the coffin was the cost of living increase with basic Goods being more expensive because of
inflation fuel costs Rising due to Russia's war and interest rates causing debt payments to go
up average everyday people have less money in their pocket to afford luxuries so the companies
that we invest in were selling less products to customers and had higher expenses due to higher
and energy and debt costs okay I need to take a breath there but in a nutshell that is why your
portfolio might have changed colors from green to Red this year but what does that mean for 2023 and
is it even possible to make profits this year the answer about the profits is yes it is definitely
possible even during last year we were able to make profits on some of the Investments because
we use dollar cost averaging which means buying smaller numbers of shares regularly or every
month even when markets were down and make some profits when the markets came back up it's not
certain that this will happen in 2023 but there is also a bigger picture because investing is not
always a short-term game and sometimes we should be looking to hold the Investments for at least
three to five years and looking at the history of the markets it has only happened twice in 70
years that markets had two down years in a row and yes it could happen in 2023 but if you invest for
a three to five year period you have a very good chance of making a profit in the short to medium
and even long term and even better if you invest when the markets at their lowest you have a great
chance to make much higher than average gains in the times to come many analysts have recently
said they predict that 2023 will be the last difficult year and that during the year inflation
and interest rates should reach their Peak before both coming down either in the end part of 2023
or early 2024 and markets historically go up when interest rates go back down
so in saying all that I will continue my strategy which is to keep investing into the markets during
the year dollar cost averaging into Market indexes and ETS and looking for good deals or special
circumstances to buy into individual stocks and with that strategy in mind these are the five ETFs
that I will definitely be looking at and buying into in 2023. we're going to start simple and
easy and go more complex with each one so first or simple I will be investing into the major Market
indexes now indexes are basically a combination of stocks that will represent a certain Market in
a part of the world for me I'll be looking at the S P 500 which is the 500 largest companies in the
USA that JSC top 40 the 40 largest companies in South Africa and the ftse 100 the 100
largest companies in the UK these ETFs give you a diversified investment into the largest and best
performing companies in each economy now if you zoom out on all of their graphs you can see that
over the long term they all go up and down but it has a trend of going up and giving great returns
on a rolling 20-year average none of these indexes have ever lost money in any 20-year period so
while the markets are down and depressed I'll be buying into these monthly to buy good low prices
so that when the markets recover I can hopefully benefit from above average high returns their next
up is satrix property fund this is a South African fund which accumulates some of the biggest and
best property companies in the country into one ETF South Africa has experienced a prolonged bad
period for property starting with an oversupply of buildings in 2015 to the immediate and lingering
effects of covid to what is now higher interest rates which will affect a portion of their loans
and expenses so much so that the property industry is showing some good value at the moment and more
importantly some great dividends with this ETF at 8.2 percent based on the recent results published
by the property companies they have been steadily recovering with improved earnings
lowering vacancies and many starting to return to pre-pandemic level dividends as they recover and
improve the share price and dividends have been slowly doing the same and I think the next five
years will be good for this ETF then we have the satrix funny 15 ETF as the name suggests it's an
ETF that tracks the 15 largest financial companies in South Africa which are banks
life insurance Investment Banking and real estate investment trusts the reason I like this
ETF is because the finance industry is one of the few that benefit from interest rate hikes because
many of them provide credits such as Home Loans car loans credit cards Etc so as the interest
rates go up so does the income of the companies many banks this year had declared extra special
dividends because of their higher income also this is one of the few ETFs that went up in 2022 by 3.8
percent and is paying a pretty decent dividend of 4.08 now that is paid quarterly or every
three months I personally have some investments in the in individual Finance shares like Banks
and insurance companies but this is a great way to buy into the entire industry and benefit from
all the companies in it such as the five big Banks investec Sanlam Discovery and old Mutual
now I want to chat a bit about passive income for a second as we know share prices are way
down from 2022 but what is also good to know is that when share prices go down the dividend income
per share goes up so if a company is paying five percent dividends at 100 round a share
if the share price drops of 50 Rand the dividend percentage is now at 10 percent so while prices
are low Dividends are high so it's a good time now to build your passive income with dividend
ETFs and the best and most reliable dividend ETF I know of is the core shares divtrax ETF it invests
in the best dividend companies in South Africa which have a track record of paying and increasing
dividends year over year also known as the s p South Africa dividends Aristocrats index some of
the companies in the ETF are gold fields naspers anglo-platinum and Vodacom and right now the
ETF is paying a dividend every three months of 6.9 percent a year then we move to the slightly
riskier ones and I'll tell you why I say that the Lost ETF we're going to look at is the Vanguard S
P 500 growth fund now what exactly is that why why are we looking at it and why do I say it's a bit
riskier so remember the S P 500 is the 500 largest US companies well this fund focuses on the growth
companies of those 500 basically meaning that companies which typically pay lower dividends
but grow the most historically basically it's your tech stocks like apple Microsoft Amazon alphabet
Tesla and Nvidia now in the past these were the biggest growing companies over the last 10 years
but in 2022 they were the shares that dropped the most with apple dropping by 30 Microsoft
by 27 meta by 62 percent and Amazon by 48 the main reason for this was Rising interest rates
and inflation basically they owe more on their debts or customers don't have money to buy their
products or other companies don't have as much budget to advertise on their platforms so because
they're at such a low base some may say they could give the biggest Returns the problem or the risk
is about timing the markets because although they went down last year there is nothing to say they
will go up this year it is still possible that this ETF could continue to go down in 2023 so
why am I recommending it well regardless of Market timing these Shares are trading at a
very large discount to their value as companies meaning you are buying shares basically on sale
and if and when they go back up you probably stand a good chance to make some very large profits the
problem is when that will be but if like me you are looking to invest for a minimum of three to
five years and hopefully longer then I think this is a very good long-term share that can return
quite a bit and lastly just a quick shout out here to the signia fourth Industrial Revolution
fund for similar reasons as S P 500 growth it is very heavy on Tech and future forward companies
that will be struggling this year and maybe even in 2023 and the near future it's down 31 this year
but it's still also might show some good value in the long term as the operating environment
for Tech and engineering companies becomes more favorable when these conditions come to pass and
when China opens back up and semiconductors become more easily available and guys
that is it for today's video where we show you a five or maybe six ETFs that we believe will be
great Buys in 2023 for short medium and long term investing we have already invested in the JSC top
40 the ftse 100 the S P 500 the Statics property fund and will soon be adding the Vanguard S P 500
growth and adding to some of the finance shares we own if you enjoyed the video and would like to
see more market news and updates on our portfolio feel free to like the video and subscribe to the
channel to see more but until then I'll see you next time as always on casual cash cheers