Will FTSE 100 stocks crash in 2023?

FTSE 100 The stock has enjoyed a very good start to the year, rising 4.38% to reach an all-time high of 7,933 yesterday morning.

They have a very good 2022, growing 0.9%. That would be disappointing in a normal year, but last year was not normal. In the US, the S&P 500 collision index 19.4%, while in Nasdaq 100 take a beating even worse, falling by the third.

This year can still be bumpy

Now, all eyes are on the US Federal Reserve. If chairman Jay Powell gives a hint that interest rates have risen, global stock prices will rocket, like the FTSE 100. But if inflation is too high to force the Fed to tighten, the US could fall into recession and take the rest of us with it.

Now, Powell chooses his words carefully. So, will FTSE 100 stocks continue to advance or fall?

Today, the UK’s economic outlook is pretty bleak. But that should not be a problem, as far as the FTSE 100 is concerned. This is because the blue-chip companies listed in the index generate 79% of their income overseas.

mining giant Antofagastapharmaceutical company AstraZenecaspirit maker Diageoeducational publisher Pearson and telecommunications giants Vodafone few make more money in foreign markets than in the UK.

Of course, we cannot rule out a global recession either, depending on economic and political factors such as how tight the Fed is, whether China recovers quickly from Covid, what happens in Ukraine, etc.

If things go badly this year, FTSE 100 shares are sure to catch on. Although as we see in 2022, the index has defensive strength.

No problem, you know

If I am honest, I must admit that there is no answer to the question I asked at the beginning of this article. No one knows if FTSE 100 stocks will crash in 2023. There are too many variables. All I know is that in the long run, the market rises more often than it falls.

There are always analysts, somewhere, calling the market meltdown. But this really makes the decision when investing easier. I accepted long ago that I would never find the right time to buy stocks. The stock market will always be volatile, and unpredictable.

There is a simple way I get this round. By investing for the long term. That means a minimum of five years, and ideally 10, 20, 30 years or more. So it doesn’t really matter if FTSE 100 stocks disappoint this year. What matters is where they stand when they finally start generating income from my portfolio, which has been going on for years.

In fact, I might even celebrate if the FTSE 100 shares collapse in 2023. That would allow me to buy more, at a lower price. In addition, reinvested dividends will earn more shares.