Well, the sell of continues. When will the doom and gloom end? That is the question of the day.
Welcome back to Powering Your Retirement Radio.
More than 10 trillion of paper wealth has been lost since the beginning of 2022. The NASDAQ and Russell 2000 have reached Bear Market levels. The S&P 500 is approaching and may actually get there before this episode is released.
The Fed draining liquidity from the markets to fight inflation is the leading cause of the pain the market is experiencing. To a certain extent, the Fed is seemingly okay with hurting the financial markets in an attempt to curb inflation.
Over the last 3 trading days stocks, bonds and commodities are down. Since 1965 this has only been the case less than 9% of the time. The Stay at Home Stocks tracked by Piper Cornerstone is down by more than 54% from their peak six months ago. That is more than the 2008 16-month meltdown. This is only a basket where 2008 was the whole market, but it is not a good sign.
Economists predicting a Recession jumped from 17% to 30% in a short period. That doesn’t mean anything other than people’s opinions about the market are changing. Since WWII, there have been 12 Recessions with an average decline of 30%.
Finally, the Smart Money ve Dumb Money Index shows the Dumb Money Confidence reaching one of the lowest readings in 23 years. The Crowd Sentiment poll has moved into the extreme pessimism territory.
So when will it end, good question, nobody thought 2008 would stretch on for 16 months. When it turned it turned quickly and many people missed out on the initial rebound. Nobody knows when the market will turn. Likely it will not be expected, people trying to outguess the market will likely be caught flat-footed. People who hold their course will make their money back in time.
There is no guarantee that will happen, past predictions are no guarantee of future returns. Blah, blah, blah, we are all adults, you should not rely sold on this podcast and post for advice. I am always happy to talk to people and you can set up a time to talk at www.talkwithDL.com
Hang in there, the market can make us all second guess well throughout plans. Until next time, stay safe and remain strong.
Here is a link to an article that which most of these numbers came from: https://www.schwab.com/learn/story/doom-and-gloom-when-will-it-end