Financial adviser discusses Wall Street’s worst losing streak in 100 years
May 26, 2022
Wall Street is in the midst of its longest weekly losing streak in 100 years. What’s going on with the markets, and how long will this downward trend last? To get some insight, we welcome Jay Spector, wealth adviser at Barton Spector Wealth Strategies.
How have investors been reacting to the market’s current state?
Spector said that many investors have flocked toward safe investments, which he thinks is ill-advised.
“They might pull out of their stock portfolios, their bond portfolios and look for other safe haven investments like cash. Not a good thing to do. But what we’ve advised clients to do is to focus on what their investment plan is and what their goals are. So making a rash decision to try to save what they have could be more detrimental to them over the long term.”
The Fed is raising interest rates. Does that make people less likely to take out a loan?
Yes. According to Spector, overnight interest rates charged by banks to each other can have a chilling effect on buyers. He used the real-estate market as an example.
“If people are looking for their first home, or looking to upgrade homes, even though values have increased on the home sale side, prices for resale homes have obviously increased, so you’re going to so, that’s going to hurt people and their buying power when they’re looking to purchase another home.”
Should people invest in bonds to keep up with interest rates?
It depends on what your financial goals are, according to Spector.
“Bonds are not the be all end all for the investor. You have to make sure that you do try to outpace inflation in a normalized market, and bonds may or may not do that for you, depending on what you need for retirement or what your goals are for your money.”