You have been reading warnings about the S&P 500 and the truth behind it here on Your Survival Guy for years. Now, everyone else is catching up. The big firms making up a disproportionately large part of the index’s value are suffering declines and bringing the index with them. Matt Murray writes in The Wall Street Journal’s 10 Point email:
The 2022 pullback in U.S. stocks is changing investors’ behavior, with more volatility expected.
The breadth of the market’s selloff has been striking, dragging valuations lower and tempering enthusiasm for risky bets in the options market. Shares of firms that ran up during the pandemic years and carry large valuations are falling out of favor. In particular, the technology industry, which powered the U.S. economy during the pandemic and grew at tremendous scale during a decade of ultralow interest rates, is confronting one of the most punishing stretches in years. The stocks of Netflix, Meta Platforms and Amazon all are down more than 30% this year, exceeding the more-than-13% drop in the S&P 500. Cryptocurrency prices are also slipping, bruising individual investors and a growing crowd of institutional investors. U.S. stock futures fell today.
Action Line: You need to be more than a passive index investor. You need to build a plan of individual securities with a professional who can guide you. If you need help, I’d love to talk with you.
