Jun 14, 2022
By Jane Brown
These are tough days for investors in the markets.
The TSX has re-entered correction territory and the S&P 500 is now officially in bear market territory.
A bear market is a term used on Wall Street when an index like the S&P 500, the Dow Jones Industrial Average or even an individual stock has fallen 20 percent or more from a recent high for a sustained period of time.
Market enemy number one is interest rates which are rising quickly as a result of the high inflation battering the economy.
Zoomer Radio’s financial analyst Greg Bonnell with TD Wealth says investors are bracing for another rate hike from the U.S. Fed.
“It’s getting people really nervous about the fact that maybe going up by half a percentage point, which just a little while ago, we were calling a mega size hike is going to be enough. But some people right now are even talking about 75 basis points, three-quarters of one percent, in one shot, if not this week then some point later in the Summer. So that game has definitely changed for investors,” Bonnell explained.
Low rates act like steroids for other stocks and investments and Wall Street is now going through withdrawal.
So what should the individual investor do? Most advisers suggest, unless you need cash now, the best course of action is to ride through the ups and downs of the market for long term gain.