Wall Street is back in the claws of a bear market as worries about inflation and higher interest rates overwhelm investors.
Why use a bear to represent a market slump? Bears hibernate, so bears represent a market that’s retreating, said Sam Stovall, chief investment strategist at CFRA. In contrast, Wall Street’s nickname for a surging stock market is a bull market, because bulls charge, Stovall said. The Federal Reserve has made an aggressive pivot away from propping up financial markets and the economy with record-low rates and is focused on fighting inflation. The central bank has already raised its key short-term interest rate from its record low near zero, which had encouraged investors to move their money into riskier assets like stocks or cryptocurrencies to get better returns.
Russia’s war in Ukraine has also put upward pressure on inflation by pushing up commodities prices. And worries about China’s economy, the world’s second largest, have added to the gloom.Even if the Fed can pull off the delicate task of tamping down inflation without triggering a downturn, higher interest rates still put downward pressure on stocks.
Stocks have declined almost 35% on average when a bear market coincides with a recession, compared with a nearly 24% drop when the economy avoids a recession, according to Ryan Detrick, chief market strategist at LPL Financial.If you need the money now or want to lock in the losses, yes. Otherwise, many advisers suggest riding through the ups and downs while remembering the swings are the price of admission for the stronger returns that stocks have provided over the long term.
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LI Thanks Joe. FJB
LI Thanks 81 million. You put some great people in charge of our Country. Main Street - store for rent Small businesses - destroyed Savings - obliterated ALL YOUR FAULT!
LI Biden administration failure so many so often Joe is pleasing his friends in China
NJ 'a general decline in the stock market over a period of time. It includes a transition from high investor optimism to widespread investor fear & pessimism. One generally accepted measure of a bear market is a price decline of 20% or more over at least a two-month period.' (wiki)
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LI Thank you Joe Biden for building back better 😂
LI BREAKING: January 6 Committee drops bombshell, reveals that Trump “ripped off” his gullible fans to the tune of $250 million by raising donations for an “Election Defense Fund” that never existed — and then funneling that money to himself and his inner circle. Bozo supporters
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