The question on everyone’s mind is, “What’s going to happen to the stock market?” There’s been a lot going on over the past few weeks, so let’s review what is happening and make a prediction.
Fed Rate Cuts
Last week the Federal Reserve lowered the federal funds rate by 0.25%. Two more rate cuts are expected by the end of the year.
The federal funds rate influences borrowing costs for businesses and consumers. For example, the federal funds rate influences mortgages, credit cards, and the stock market.
Jobs Report
The expected increase in jobs was lower than expected. The unemployment rate is 4.3%, the highest since October 2021, but low by historical standards.
Recession Fears and the Market
Given the latest news, there are recession fears. They are higher than they have been in the recent past. The dreaded word is on the tip of a lot of peoples tongues. For many a recession means stock market doom.
What Can I Do?
A lot of the goings on are out of your control – interest rates, hiring, and the performance of the stock market. When you realize that you can’t control these factors, it becomes a lot better for you.
On the other hand, there are many proactive actions that you can take. Remember that these actions are under your control and they can be very powerful.
Here are a few suggestions that can be wonderful for you:
- Prepare with a good plan
- Stay invested
- Don’t time the stock market
Prepare with a Plan
Prepare your life and investment portfolio for what you want in 2025 and many years beyond. A solid financial plan will help you weather the stock market downs, if they happen. You will also benefit from stock market upswings as well. Re-examine where you are and what your money is doing for you.
Stay Invested in the Stock Market
It’s always the best idea to stay invested. Buying and selling the majority of your portfolio during stock market ups and downs can be dangerous. It’s impossible to buy on the low and sell on the high. Plus, you may incur some pretty hefty taxes.
Don’t Time the Stock Market
Unfortunately, no one can sell at the peak and buy at the low. It cannot be done. These efforts are futile and you will most likely cost yourself a lot of money in the short term and a larger amount in the long run.
If you’d like to chat about stock markets, investing, and/or personal finance, give me a call.