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Between overhyped initial public offerings ('IPOs'), crypto scams, and meme stocks, it has never been easier to lose money in the markets...
At the same time, the prices of everything – gas, food, your electric bill, and just simple takeout – have shot higher.
While there have been recent signs of relief, inflation is still running hot. According to the latest number from the U.S. Bureau of Labor Statistics, the Consumer Price Index ("CPI") is up 6.5% for December. Sure, that's down from the June peak of 9.1%... but inflation remains at multidecade highs.
Adding to the worries about the future of the economy, layoffs seem to be accelerating. A survey last year from consultant PwC showed that at least half the more than 700 executives and board members who were polled said that they were reducing staff or planning to... and slightly over half had already implemented hiring freezes.
More recently, you probably saw the big news about the waves of job cuts across the tech sector. Earlier this month, Amazon (AMZN) announced plans to lay off 18,000 workers... while Microsoft (MSFT) announced it will lay off 10,000 members of its staff. And Meta Platforms (META) is still on a hiring freeze after laying off more than 11,000 employees in November.
As for your retirement account? Even if it's ahead of where it was just a few years ago, the market's comeuppance last year has made many people feel less wealthy. Just look at the beating the benchmark S&P 500 Index took last year...
Even with the small rally to start off the new year, the very thought of investing right now might feel counterintuitive to downright nauseating...
And you're not alone... Millions of Americans are waiting for a "better" time to get in.
Good luck! Nobody can say exactly when the right time will be.
And there is no right strategy. It's one thing to run a fund, under pressure to show good returns every quarter... It's another to be a regular investor with a long-term view.
However, avoiding stocks entirely can mean missing out on big gains in the future. Just consider the numbers...
According to JPMorgan Asset Management, if you had invested $10,000 and missed the 10 best days from 2002 to 2021, your gains would have been cut by more than half. If you had missed 30 days, you would have missed out on more than 80% of potential gains.
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Keep in mind that I've seen a few blowups in my nearly five decades in and around the markets, starting when I graduated from college in 1974...
My first job was as a business reporter in the then very sleepy town of Boca Raton, Florida. It was during one of the worst bear markets and recessions of all time. I remember seeing the shells of half-finished condos getting overtaken with weeds – the sign of a boom time gone bust.
Things were so bad that in his keynote at a convention I was covering at the Boca Raton Hotel and Club – the swankiest place around – one famous economist exclaimed: "There's a 50% chance that we slip into a recession greater than 1929."
Five years later, when I was a business reporter for the St. Paul Pioneer Press – two months to the day before I got married – BusinessWeek magazine ran its infamous headline, "The Death of Equities," with the subtitle, "How Inflation is Destroying the Stock Market"...
But look at what the S&P 500 did in the next two decades after that BusinessWeek issue...
I was at TheStreet.com working alongside Jim Cramer in 2000 when the dot-com bubble burst. I remember the panic well – from its peak in March 2000 to the bottom in October 2002, the tech-heavy Nasdaq Composite Index collapsed 78%.
But over the next several years leading up to the next crash, take a look at the recovery...
The point here isn't calling tops and bottoms... I'm saying that I've been there, I've seen it all, and now that I'm 70, I'm taking everything I learned and sharing that with anybody who will listen.
The lesson is exceedingly clear...
When it comes to investing, even with the best companies, there is no straight line.
While the market can go down and stay down for extended periods, it's up substantially from each of those disasters. Or to put it in perspective... From its lows in 1974, the S&P 500 is up nearly 7,000%. So much for the death of equities.
During situations where fear abounds is where prepared investors can position themselves to make some of the biggest gains...
I recently went on camera to share the details about a series of "rolling blackouts" set to hit 235 U.S. cities this year.
It's not a matter of a grid failure, a series of power outages, or anything like that... and ignoring it could be the difference between making huge returns in the market this year or getting left in the dust.
Get the full details – including how this whole setup could supercharge your financial situation – right here.
Regards,
Herb Greenberg
January 28, 2023
