Yesterday was bad for investments. Today is worse.
Wall Street veered sharply into the red on Friday following a new inflation reading that was worse that economists had expected, fanning worries about more aggressive steps by the Federal Reserve to tame rising prices.
At 10am, the Dow was down 751 points, or 2.33 percent. The S&P 500 lost 2.56 percent and the Nasdaq composite was down 2.99 percent.
The Labor Department’s report on Friday showed that the consumer price index jumped 8.6 percent in May from a year ago, the fastest increase since December 1981 and much hotter than expected, a sign that inflation has not yet peaked.
The new figures suggested that the Federal Reserve could continue with its rapid interest rate hikes through September to combat inflation, after already raising rates by 75 basis points since March.
I watch my 401K account almost daily. As of the close of the market yesterday, the value of my account is down 18.54% since January 1, 2022, and more than 8% for the past year, effective May 31. I admit I am an aggressive investor; more than 50% of my account is invested in a stock fund. Bonds aren’t doing much better, btw; my bond fund is only down 7.4% over the past year. Whoopee.
This is the primary reason why.
If you have any question why we are in such a steep inflationary period, here is Rand Paul explaining it (skip ahead to about the 3:00 mark):
As he points out, it isn’t just the Democrats in government who won’t stop the crazy spending. Plenty of Republicans are just as guilty.
Stella's Place 
Spoke with Wicked Son this morning, which in of itself is alarming – calling Evil Mom at noon on a Friday?
WS’s stocks are also taking a beating, and WS is an aggressive investor like you, Stella.
Should WS cash in one stock and put it as a down payment on real estate? It would require both of our investments (my house, for one). I said go for it, but what do i know?
Any advice?
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I’m leaving everything just as it is for now. I will be forced to make a rather large minimum withdrawal this year (based on the value at the end of last year). Might invest that, but I haven’t decided yet.
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Thanks.
This is a tough one, as I think this is going to be multiple times worse than Jimmy Carter.
Wicked Son is just now early 40s, so perhaps there’s time for him to recover. I just don’t know anymore.
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DIL is not too worked up over any of this, and sometimes I wish I had her calm.
As she told me a couple three days ago, “I read the last chapter, I know how this ends.”
Boy, isn’t that the truth?
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A couple years ago I moved my 401K from stocks to precious metals, When I set it up to begin collecting, I was pleasantly surprised. I’m no whizz at the stock market, though. I was just disappointed at the rate of growth.
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The Dow finished down 880 points today.
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I got my IRAs out of the market three years ago, lost some of the gains others got, but it made my stomach hurt to fear the market all the time. Bought a house, now buying another one. Probably will buy some land in a subdivision when the prices fall after people get too upset over high interest rates and stop buying (I have cash, so don’t need to finance.)
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Difficult to do with a 401K, since you have to pay tax on the amount you withdraw unless you roll it over into another retirement account.
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