The five things not to buy in 2023, some of which are still very popular in the tech circle

The past year has been one of contradictions.

The drums of a recession are ringing, interest rates are rising, and the stock market has fallen sharply, but retail sales have grown 6.5% over the past 12 months, lagging behind the 7.1% increase in the cost of living.

There are plenty of reasons to cut spending in 2023, and there are others. The Bureau of Economic Analysis said the personal savings rate, or the percentage of disposable income that personal savings have in disposable income or residual income after paying taxes and expenses, fell to 2.4 percent in the third quarter from 3.4 percent in the second quarter.

That's the lowest level since the Great Recession triggered by subprime mortgages and the eighth-lowest quarterly personal savings rate on record (since 1947). According to government data, inflation-adjusted savings, adjusted for inflation, are down 88% from their 2020 peak and 61% lower than before the pandemic. The personal savings rate reached 2.4% in November, compared to 2.2% in October.

Are people buying stocks during a bear market, or have they exhausted their COVID-era savings? Whatever the reason, smarter investment and spending decisions seem to be the most prudent approach, especially given the uncertainty surrounding the economic outlook in 2023.

There are signs that people are already cutting back on certain spending. Despite year-on-year growth, retail sales fell 0.6% month-on-month in November, the biggest drop in nearly a year, mainly due to weak auto sales.

About those new cars: According to J.D. According to the joint forecast of Power and LMC Automotive, total new vehicle sales in 2022 are expected to reach 13,687,000 units, down 8.4% year-on-year. Philip van Doorn, a reporter for MarketWatch, explains all the reasons why you might not want to buy a new car in 2023, aside from rising prices.

So, where else can you save money in 2023? MarketWatch authors offer the following recommendations.

SPACs (Special Purpose Acquisition Company)

During the pandemic, people like to buy special purpose acquisition companies known as SPACs. According to SPAC Insider, in 2021, 613 SPACs were listed on U.S. stock exchanges through IPOs. The previous year, SPACs had conducted 248 IPOs. Never before have more than 100 SPACs been listed in a single year. There are some SPACs that have a lot to do with Donald Trump and Selina Williams is connected. There are so many SPACs that one simply calls itself "Another Acquisition Corp."

The existence of SPACs is a means of taking private companies public, and in theory, it provides a faster and less regulatory means for these shell companies to access public capital. The U.S. Securities and Exchange Commission (SEC) warned investors last April that the alleged advantages of the SPAC process, such as reduced legal liability, may not prove so reliable if reviewed in court.

Although SPACs have no actual commercial operations or operations, they raise money and try to use those funds to buy something that is real. But a recent study showed that investors who bought private SPACs since 2015 suffered an average of 37 percent losses one year after the merger. SPACs and new ETFs (SPCX) are down 12% this year.

Predictably, the craze for SPACs has been dashed, and if you see it, stay away from it.

– Nathan Vardi

Cryptocurrencies

There are two main reasons not to invest in cryptocurrencies in 2023, both of which have nothing to do with the sharp drop in price of most major cryptocurrencies, including but not limited to Bitcoin, Ethereum, and stablecoins, last year. Investors have long been accustomed to buying dips, finding value in areas that others dare not venture into, and then making money when they rise.

But crypto is different because it has no relevance to long-held market theories, and buying cryptocurrencies is more of a speculation than an investment. It sounds like just a bit of a semantic difference, but if you look at financial planning holistically, then you'll think of investing as a risk-tolerance exercise — and cryptocurrencies are all risks.

This leads to another major reason to avoid buying cryptocurrency next year: If you do buy cryptocurrency, you actually have no secure way to store it. No federal insurance guarantees transactions to fail, and individuals have little protection against cyber theft. You're on your own, and it's not a good place to put your money.

– Beth Pinsker

Meta Quest headphones

In terms of consumption, if you really like virtual reality, there is nothing wrong with using the META Quest 2 and META Quest Pro headsets, which were launched by the META platform (META) in 2022.

The problem is that you might think you bought a BlackBerry phone in early 2007. Apple is expected to finally show what the Silicon Valley giant's engineers have been brewing in a years-long augmented and virtual reality project. Consumers should at least take a look at Apple's attempts this year, if not buy any of the company's products.

The headset isn't cheap either, with Meta saying earlier this year that it would raise the price of the Meta Quest 2 by $100 to $399.99 (128GB) and $499.99 (256GB), respectively. The release of the iPhone 15 years ago changed the way people look at smartphones, and Apple's expected entry into virtual reality in 2023 could leave those who paid for Meta Quest headsets looking forward to a new reality.

—Jeremy Owens

Internet celebrity stocks

To some, companies whose business models appear to be dying and/or struggling often underperform in the stock market. But during the pandemic, the share prices of these companies have risen sharply. What fueled them was sentiment on social media, with a horde of retail investors on platforms like Reddit pushing stock prices soaring.

These influencers include video game retailer GameStop (GME), cinema line AMC (AMC) and smartphone dinosaur Blackberry. AMC recently announced the sale of $110 million worth of shares, bringing the total sales to more than $2 billion since the theater chain was swept up in the internet celebrity stock craze. Adam Aron, the company's chief executive, wrote on Twitter that the reduction left the company in a "very strong cash position."

GameStop recently posted a seventh straight quarter of losses and reiterated its goal of returning to profitability in the near term, but analysts have said there are many challenges ahead. On the company's most recent third-quarter conference call, GameStop's CEO Matt Furlong said that if the price is right, GameStop would be happy to explore the possibility of acquiring strategic assets or free businesses.

In a stock market boom fueled by ultra-low interest rates, buying such influencer companies is lucrative for some. But we're now in a bear market with high interest rates, corporate fundamentals are back in vogue, and "quirky" investment ideas like valuing cash flow are returning. More likely, the days of buying influencer stocks are over.

– Nathan Vardi

Tesla Motors

In recent years, Tesla has been the best choice for electric vehicles, while other manufacturers have struggled to put into mass production. But by 2023, there should be more types of electric vehicles, and prices are expected to decline with the years. Tesla's prices range from $46,990 for the Tesla Model 3 to $138,880 for the Tesla Model X Plaid.

As major automakers such as General Motors (GM), Ford Motor, Toyota and Volkswagen join the fray, younger Tesla followers such as Rivian Automotive, Lucid Group and Fisker are also expected to start producing cars, and consumers will have more EV options.

Meanwhile, Tesla has made little progress in product upgrades since launching the Model 3 in 2017, and the price increase has reached the level of "embarrassment" that the company's CEO, Elon Musk, admitted. Tesla has declared that its goal is to provide mass-market pricing for electric vehicles.

The average price of a new electric car is $64,249, while the average price of a new gas car is $48,281, according to climate scientist and research manager at Recurrent Auto, an electric vehicle research and analysis firm focused on the used car market, for years there weren't many options for electric vehicles other than Tesla, and 2023 seems like a year of change.

—Jeremy Owens

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Original article by Barronschina may not be reproduced without permission. For the English version, see the January 3, 2023 report "5 things you really should not buy in 2023."

(The content of this article is for informational purposes only and the investment advice does not represent the interests of Barron's; The market is risky, and investment should be cautious. ）