DALLAS — While we just reported on navigating the stock market a week ago, we need to revisit it again because it has taken a few more plunges since then. Now that we have landed at the halfway point in this year, your nest egg may be badly broken.
The S&P 500 is off to its worst start in 52 years. The Nasdaq is off to its worst start ever. And their bad starts are really hurting how we might finish. In a Marketwatch column, the director of the Center for Retirement Research at Boston College estimates so far this year, market losses have cost our 401(K) plans $1.4 trillion and our IRA accounts have lost $2 trillion.
And we keep hearing from experts who are issuing dire predictions about more market losses. The S&P 500 tanked more than 20 percent in the first half of the year. It’s hard to predict the future from here. So, Fidelity is looking to the past, citing one expert who noticed that the S&P 500 has fallen at least 15% on 17 other occasions. They found that eleven of those times the market didn’t hit bottom until the Fed started lowering interest rates.
Right now, the Fed is still raising rates. In fact, it’s expected to hike interest rates again late this month. Still, even many of the experts who expect a lot more market pain ahead are advising that you stay in stocks, and even double down. If you are not comfortable with investing, and you have a 401(K), many experts still say the key is to stay diversified.
Many of the mutual funds or index funds you can choose from will do that for you. After that, they say you must give the market, and your investments in it, time to recover.