Financial expert advises on investments after market declines, inflation soars

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RICHMOND, Va. (WWBT) — After the S&P 500 closed in bearish territory on Monday for the first time since the pandemic began, this volatile market has many worried about their 401Ks and their financial investments.

“I never thought our country would be in this situation we find ourselves in,” said Sherry Lowry, who retired nearly four years ago.

Lowry has been living on a fixed income for years, but with what’s happening on Wall Street and everyday property prices rising, she’s worried about her retirement funds.

“Retirement hasn’t really gone up as much as with groceries and gas prices, everything; it impacted our entire lives, Lowry said.

NBC12 financial expert Carl Carlson believes part of the cause of the decline is record inflation, hitting a 40-year high last month at 8.6%.

“We’re seeing a lot of volatility in the stock market right now, which just means it’s going up and down a lot, and it’s mostly reacting to inflation numbers,” Carlson said.

Carlson said the Federal Reserve is the primary tool currently being used to slow that inflation by raising interest rates.

He said that, as history has shown, it’s not foolproof.

“You know, in the 70s and 80s they had to raise it from 5% to about 21%, and then inflation started to come down,” Carlson said.

Carlson said if you have a 401K or an IRA, you’ll likely see a big drop in its value.

His advice to retirees or soon to be retired is to wait and leave it alone.

“I would say don’t be scared and go liquidate everything in cash because you’re going to take a substantial loss, and then when are you going to come back,” Carlson said.

As prices continue to rise, one has to think back to when they should finally stop working.

“I was planning to consider retiring in a year or two, but now you keep working and paying the bills,” said John Lowry, Sherry’s husband, who is still working.

The Federal Reserve is preparing to make a sharp hike in interest rates on Wednesday to slow inflation.

It will also make new homes or cars more expensive and drive up credit card rates.

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