DETROIT (WXYZ) — “What we have to do is, basically, just calm down and think about what we are doing,” said Nakotice Smith cautiously concerned about the economy.
Solid advice in the best of times – but in these times, with inflation at 8.6% in May, the highest since December of 1981 – calm and caution is the advice of financial experts as well.
WXYZ’s Dave LewAllen asked financial expert David Sowerby, “What do you tell them, stay the course?”
“The number one rule, with the market down 20%, don’t capitulate, avoid that capitulation trade where you feel like you just can’t take any more pain and you’re going to be a seller,” said David Sowerby, Ancora Managing Director, Portfolio Manager.
Sowerby manages a mutual fund with over $33 million in total assets. During a Zoom interview today with Dave LewAllen—he said he’s still finding companies with solid earnings, cash flow, and dividend growth for his investors.
“I can’t tell you what’s going to happen in the next month or so, but I feel pretty comfortable that over the next two to three years, US stocks will still compound to the investor at about 8% annualized rate, that’s still one of the best places to grow your retirement is in the US stock market, in spite of the recent pain,” said Sowerby.
Joe Rosenberg lost his home in the great recession of 2007. Despite the personal pain then – he survived that downturn.
“I just dipped deeply into my savings to sustain myself but, you know, I’m going to be 75 this month and I’ve still got to work because of that, so I’m still recovering from that, but I have a comfortable life and I’m in the market but I’m also confident that it will come back,” said Joe Rosenberg, concerned about the economy.
Detroit-based Benzinga provides real-time financial information for individual investors.
"The market is cyclical... presents itself," said Patrick Lane, Benzinga Executive Vice President.
