This is becoming a bad case of listening to a vinyl record with a scratch as you get the same thing over and over and it’s not amusing.
The Dow is now down for six weeks in a row and the NASCAQ and the Standard & Poor’s 500 stock-index have dropped for five weeks in a row, which hasn’t happened in a decade.
The high tech losses have particularly dropped the NASDAQ index, which is down nearly 25%.
Many are labeling the drop a bear market rather than a correction. We are in the first stages of the Federal Reserve raising rates.
There is a real possibility that Wednesday we will find inflation coming in over 8%.
That can only mean that the next rate increase will be a half a point and there might be more to come.
The problem is that inflation is far stronger than the Fed could imagine and the supply chain will not be fixed this year.
We also have consumers spending money after a couple of years being sequestered at home due to the pandemic.This is the same song over and over again I seriously doubt that the demand will stop soon.
Rising rates will have an impact, but it will take time.
Time is not on the side of this market.
If one is looking for alternatives, crypo currency has not proven to be a friend.
Bitcoin has lost half of its value from the highs in November.
It certainly is not the new gold. Holding your money in cash is a losing proposition, as the rate of interest you can capture is far short of the rate of inflation.
Housing is great if you are selling but that will stop much sooner than later as more and more people will not qualify for loans and there is just so many cash buyers.
There is little the government can do to help and I am not sure that they aren’t a big part of the problem we are in now.
It is a bit disconcerting when the best scenario is for a mild recession.
I would say though that both the situation with China and Russia have been eye opening for many.
We tend sometimes to ignore what is right in front of us in the pursuit of the next dollar.
I am not saying that this is synonymous with the ends justify the means, but it is getting businesses to rethink their strategic plan.
I am not sure that there is any quick fix for either problem.
All this leaves me interested In the market for the first time since March of 2020.
If you will recall, we dropped 30% that spring but came roaring back.
I took advantage of the situation and purchased some quality stocks.
We will have that opportunity again.
This is not the kind of market one needs to be margined.
If you have cash available, you will get a chance to own some of the best companies in the world at reasonable prices.
The problem will be executing such when all the financial news tells you that the world is ending.
It just is never an easy game to play.
