In other words, the stock market seen better days. But what happened and why? Should everyone panic? Here’s everything you need to know.
What is the market doing?
Things are very unstable right now.
“Even great companies are affected by the market,” said Greg Swenson, founding partner of an investment bank in London.
CNBC added that the market has been in a state of panic for months, “starting with high-growth unprofitable tech stocks late last year, and in recent weeks even spreading to companies with healthy cash flow stocks.” The decline wiped out most of the “The rapid rise in stocks from March 2020 pandemic lows”. In short, there hasn’t been much good news lately, so the market is ‘energized and on edge’ sound explain.
Why are investors so anxious?
Several different reasons.
On the one hand, the Fed’s recent rate hike Make investors worry that a recession is coming.as New York Times In other words, markets are so used to “the last two decades of easy monetary policy” that they don’t know how to respond to such a dramatic change.
And that’s without mentioning China’s COVID-19 lockdown, rampant levels of inflation, soaring oil prices, and ongoing supply chain issues, era notes.
The Fed has been hoping it can lower inflation without pushing the U.S. into recession — a difficult strategy known as a “soft landing.” Magazine. But investors are increasingly skeptical about the central bank’s success. new confirmation Federal Reserve Chairman Jerome Powell even seemed uncertain, acknowledging on Thursday that “the process of getting inflation down to 2% will also bring some pain.” Magazine.
Are some companies hurting more than others?
Tech companies are feeling a particularly strong burn, sound Notes, take the embattled fitness company Peloton as an example.Trading platform Robinhood also recently announced layoffs, in April, streaming giant Netflix reported subscribers decrease sent its first time in ten years Stocks plummet. Meta, Amazon and Alphabet have also been struggling recently.
Cryptocurrencies have also been difficult times. On Monday, Bitcoin hit its lowest level since July 2021. eraMeanwhile, Luna tumbled sharply over the weekend, “trading to 0.5 cents from over $60 on May 9”, Magazine Written on Friday.some strategists are projection Prices will fall until they reach pre-pandemic levels.
Should I be worried?
Sure, it’s scary, but it’s not the end of the world. The stock market always rises.
Kristin Myers, editor-in-chief of Finance.com, said: “While we are seeing this broad sell-off in the market and it seems inevitable, this is not the time to panic.” balanceTell sound.
Financial services firm Charles Schwab added that while “disturbing”, market volatility was “not unusual in history”.If long-term investors properly diversify and personalize their portfolios, “the recent market decline is likely to be short-lived [their] Long-term investment plan. “
“I think investors need to remind themselves that market declines are common,” said Sam Stovall, chief investment strategist at CFRA Research. sound.
As the Fed continues to push interest rates higher (expected to June and July), Schwab estimates that these ups and downs are likely to continue for the foreseeable future.
So, what can I do?
For brave young investors, now may actually be a good time to buy, especially if a stock or asset on your wish list is trading at a lower price than in the past, sound write, each balanceMiles. “Think about all this being discounted,” she added.
You can also think of the current plunge as a push to check your 401K more often (though possibly temporarily).Myers recommends watching quarterly, “just to see what’s going on and reassess,” concludes sound.
Also, “don’t try to time the market,” advises Schwab. Plunging can be nerve-wracking, but your portfolio is usually better off staying the course.