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Recession Fears Rise as Inflation Increases<\/a><\/u><\/strong><\/p>\n\n\n\n With inflation on the rise and the market entering bear market territory, investors are now fearing a recession around the corner. <\/p>\n\n\n\n If you\u2019re at or near retirement, a recession may require pivoting your retirement investing strategy. The market turbulence and uncertainty are scary\u2014but now is the time to take action and prepare yourself for the coming months. It\u2019s important to understand the following \u2013<\/p>\n\n\n\n ____________________________________________________________________________<\/p>\n\n\n\n The Fed Funds Rate is Still Very Low<\/strong><\/p>\n\n\n\n U.S. Stocks Dip into Bear Market Territory \u2013 <\/strong>Stocks rallied on the day of the Federal Reserve\u2019s announcement, but last week saw the S&P 500 dip into bear market territory (a decline of -20% or more). Technology shares have led the declines while Energy stocks have moved in the complete opposite direction, having posted sizable gains year-to-date. Even with technology\u2019s outsize declines, however, the S&P 500 technology sector remains over +20% higher than it traded pre-pandemic, a reminder that the drawdown follows two years (2020 and 2021) of major gains. Looking ahead, it\u2019s important to remember that trying to time the bottom of a bear market is hazardous and ripe for making a serious misstep. History tells us that pronounced volatility \u2013 in both directions \u2013 is likely to persist now that a bear market has been confirmed. In the last 20 years, about 50% of the S&P 500 Index\u2019s strongest days were posted during a bear market, and 34% of the market\u2019s best days took place in the first two months of a bull market \u2013 which can only be confirmed with the benefit of hindsight.4<\/sup><\/p>\n\n\n\n Retail Sales Fell 0.3% in May, But the Headline Number Doesn\u2019t Tell the Whole Story \u2013 <\/strong>Market-watchers were spooked this week when retail sales \u2013 which measure spending at stores, restaurants, and online \u2013 dropped by 0.3% month-over-month in May. The decline marked the first-time retail sales dipped in 2022, which garnered headlines that the U.S. consumer was tapping out. But a closer read of the figures shows that a sizable drop in vehicle sales disproportionately affected the number. Excluding autos and gasoline, retail sales were positive for the month. It is also worth noting that year-over-year, retail sales have risen 8.1% from last May, which trails the 8.6% inflation rate but still signals that consumers are out spending. According to Federal Reserve Chairman Jerome Powell, \u201coverall spending is very strong,\u201d and \u201cwe see the economy slowing a bit but still at healthy growth levels.\u20195<\/sup><\/p>\n\n\n\n U.S. Home Equity Reaches Record High \u2013 <\/strong>In a week seemingly filled with bad news and negative headlines, there was one bright spot for homeowners in the U.S. Total home equity jumped by nearly 20% in Q1 2022, reaching a record-high $27.8 trillion. The amount of equity that homeowners can access grew by a record $1.2 trillion in Q1 to $11 trillion, and a majority of that equity is in the hands of homeowners with mortgage rates lower than 4%. From a net worth perspective, an optimistic view would be that a 20% increase in home equity over the past year neutralizes a -20% loss in the stock market, keeping household net worth near record highs.6<\/sup><\/p>\n\n\n\n Is the Market Entering a Potential Recession? <\/strong>For the past few weeks, there have been many headlines discussing where the market is headed and if a recession is around the corner. If you\u2019re at or near retirement, a recession may require pivoting your retirement investing strategy. In order to do this, it\u2019s important to understand how recessions work, how long they last, and how to potentially protect yourself and your family from long-term damage to your assets and security. We can help you with our free guide, A Recession is Coming: 6 Insights to Know Now So You\u2019re Prepared<\/strong><\/a>.<\/strong>7<\/sup><\/p>\n\n\n\n If you have $500,000 or more to invest, get our free guide today. You\u2019ll learn the scope and impact of recessions, and get our viewpoint on the most important moves you can make to weather this one. Don\u2019t wait\u2014get this guide today!<\/p>\n","protected":false},"excerpt":{"rendered":" Fed’s hike biggest since 1994, auto sales drop drags down retail, U.S. home equity reaches record high, tech leads stock decline while energy shares rise. <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73,1],"tags":[],"class_list":["post-11768","post","type-post","status-publish","format-standard","hentry","category-private-client-group","category-steady-investors-week","category-uncategorized"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/11768","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=11768"}],"version-history":[{"count":3,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/11768\/revisions"}],"predecessor-version":[{"id":11772,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/11768\/revisions\/11772"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=11768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=11768"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=11768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
<\/u><\/strong>If you have $500,000 or more to invest, get our free guide. You\u2019ll learn the scope and impact of recessions, and get our viewpoint on the most important moves you can make to weather a potential one. Don\u2019t wait\u2014get this guide today!
Download Your Copy Today: A Recession is Coming: 6 Insights to Know You\u2019re Prepared<\/em><\/a><\/u><\/strong>2<\/sup><\/u><\/a><\/strong><\/em><\/p>\n\n\n\n![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/06\/pic1-1-1024x395.png\")