EVANSVILLE, Ind. (WFIE) – There are growing concerns about the state of the economy, with the stock market sliding to new lows since 2020.
The stock market continues to hit new lows, while the prices of everything from gas to groceries continue to rise.
Experts call it a “volatile market“.
On Friday, the S&P 500 entered bearish territory, down 20% from a recent high.
The Dow Jones also lost more than 1,000 points, its biggest loss since 2020.
Former National Bank chief economist Matthew Finn says investors should play it safe for now.
“Now is not the time, in times of market volatility, now is not the time to take big bets,” Finn said. “Now is the time to remove risk from your portfolio.”
Finn says the past two years have created a perfect storm for inflationary pressure.
Investing a lot of money in the economy to improve it during the peak of the pandemic, the economy then reopened and the crisis in Ukraine caused an imbalance in the costs of energy and food, all that contributed to it.
“The economy is going to slow down,” Finn said. “We raised it with zero percent interest rates and lots of money. When you pull that out, it will take the market a while to get out of it.
Despite the market’s unpredictability, Finn advises not to panic about your finances.
“Be disciplined,” he said. “Have a plan and stick to it.”
Finn says it’s actually a good time to stay in the market. For regular investors, when the market dips, you buy low.
“Investors sometimes tend to panic and want to get out of the market when it’s falling, but if you have a disciplined plan, even if it’s not part of your 401K. If you’re just a regular investor in the market, now’s the perfect time to follow it,” Finn said.
History shows the market has seen worse, and Finn says it will recover again.
“We’re going to get through this, we always do,” he said. “There is always innovation, there is always something. We’ll get through this, it just takes time. It’s way too early to panic.
Finn says financial literacy is a big part of investing. He says most banks offer courses or videos that teach the basics of finance if you want to learn more.
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