CAMP HILL, Pa. (WHTM) -- Wall Street entered a bear market Monday as the S&P 500 sank 3.9%, bringing it more than 20% below the record high it set in January.
"We want to believe that the stock market only ever climbs. The reality is this is what the stock market does at this point in the economic cycle," said Anthony Conte, managing partner of Conte Wealth Associates.
Wall Street is reacting to a report that inflation is getting worse, not better, as the federal reserve is poised to raise rates.
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"We have bear markets with relative frequency. This is not at all uncommon," Conte said. "Bear markets happen roughly every three and a half years. Bear markets on average last about 9.6 months, so just under 10 months."
Financial advisors say not to worry.
"One of the great investors you know, said that when other people are scared, be greedy and when people are greedy, be scared," said Jona Green, a financial advisor with Edward Jones.
There's always a risk that things could worsen when we see inflation this high. "But if you're saving into your 401(k) plan, and you're in your income-earning years, should frankly be cheering when the stock market slides because this is your opportunity to walk into the store, see everything on sale and buy it," Conte said.
Because at this point, you'd be buying a greater number of shares with the same amount of money.
"What I tell a lot of folks to do if it suits their financial picture, if it's right for them, tell them to at least consider increasing their savings rate into their 401(k) plan right now," Conte said.
And if you're thinking of putting more money in bonds instead of stocks, bonds lose considerable value when the federal reserve raises rates.
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"The expectation and the hope is that the Federal Reserve continues to be willing to be this kind of aggressive, and frankly, I'd much rather see us in recession than with runaway inflation, runaway inflation is much more difficult to manage," Conte said.
"People who are closer to retirement, absolutely, there's other concerns. Hopefully, that would be a reason to be working with an advisor or to get good advice," Green said.
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