NORFOLK, Va. – The S&P 500 is seeing its worst first half in 50 years, and the NASDAQ is seeing its worst first half ever.
Lucky for us, we have an expert here to talk more about it — Carl Carlson, the CEO and founder of Carlson Financial.
“It’s been a very rocky first half of the year so far, S&P down, I think it was 1970, the last time we had a first half of the year this bad,” Carlson said. “And the NASDAQ, being a younger index, has never had a first half of the year this bad. But I think instead of running and jumping off the tallest building, there might be other things we should look at.”
According to Carlson, if you’ve looked back just over the last two years, the S&P and the NASDAQ skyrocketed after we came through the pandemic.
“So mid 2000-2001, we had massive increases, then all of a sudden, we get this big correction, and everything starts to turn down,” Carlson said. “Now, if you look at where we’re at, over the last five years, we’re up about an average of 10 to 12% a year, which historically is still good. But the problem was, it was up so high , and then it came down quite a lot.
“Folks, looking at your portfolios or your 401Ks, you have seen some pretty big decreases in there,” he added. “But when you’re owning stocks and investments like this, you’re owning them not to just hold them for a month, or two months, or six months — most of these investments, you should be thinking about this as something you’ re going to have around for 5,10,15, some people even 25, 45 years.”
But when things look this dire, what’s the best thing to do with your 401(k)?
“Relax, and don’t change anything at this point,” Carlson said. “So you need to not just jump in and start selling everything, because you’re going to sell it when it’s down a lot. And then, when do you know when you should get back in?
“What happens is, most people, if they sell now, they wait until the market gets almost back up to where it was, and then they come back in. And then the next thing that happens — the market goes down again. So you don’t want to try to time the market and figure this all out, ‘When should I sell, when should I buy back in?’ Because history has proven that no one can accurately do that.
“And the way the stock market’s going, now we’ve seen times when one day you can see an increase of 5%, or a drop of 5%. Have patience as we get through this. And it could be a year, two years before we get back to the highs that we were at last November.”