The stock market has been volatile this year, with sharp rises and falls in the Dow Jones Industrial Average, S&P 500, and NASDAQ Composite indices. The causes of these changes are varied, from excessive market valuations to external events that exceed other fundamental factors. Eric Freedman, U. S.
Chief Investment Officer at Bank U. A., emphasizes the importance of maintaining a long-term perspective and having a plan to inform your investment decisions. He also warns that markets are likely to remain volatile. The Inflation Reduction Act, recently passed by Congress and signed into law by the President, includes new tax provisions that could affect the timing of the stock market recovery.
Diversification and asset allocation do not guarantee profitability or protect against losses, but they can help you achieve your long-term financial goals. The stock market had a winning week as investors weighed the possibility of the Federal Reserve slowing down due to sharp interest rate hikes. Companies are reporting positive results in the banking and technology industries, but social media stocks have warned of lower-than-expected advertising revenues. Meanwhile, the Federal Reserve is looking for signs of economic and market slowdown as proof that rising interest rates are cooling strong inflation.
As the end of the year approaches, experts recommend staying the course and sticking to your investment plans. It is impossible to time the market and, historically, it has always recovered. The Federal Reserve's main mandates are to maintain a low level of unemployment and to keep inflation to a minimum through monetary policy adjustments. There are still two more Fed meetings this year, in November and December, which investors are eagerly awaiting.