Local financial expert: investors ‘can’t panic’ over inflation, market
Wednesday brought troubling news on the economy. Inflation has reached levels not seen in 40 years, since 1981.
Consumer prices jumped 9.1% over a 12-month period ending in June, with the cost of energy, gas, food and rent skyrocketing.
Much of the increase is driven by the cost of gas. However, the report shows food is also up. It costs 13.8% more to buy meat at the grocery store over the 12-month time period ending in June.
Steven Bouchey, President and CEO of Bouchey Financial Group in Troy, says inflation is affecting the choices all of his clients are making about what to spend money on, regardless of how much money they have.
He says the report from the Bureau of Labor Statistics might not be as much cause for alarm as the numbers indicate, since the price of gas has gone down in the past few weeks.
“Inflation came in worse than expected for the most part, we were hoping we saw the peak of inflation, but it doesn’t seem as though we did. So with inflation or gas being up 11% in June, that was the biggest component but the good news, the other side of the coin, is that oil was down 20% in the last couple weeks,” Bouchey said.
He says that means people can plan to pay a couple dollars less to fill up their cars, for now.
Bouchey is also helping nervous investors navigate the current stock market. He’s urging people who may have money in stocks or a retirement account not to panic.
“What investors can’t do, they can’t panic. Anybody who has a knee-jerk reaction and gets out, they will lose. You need to be in the stock market, let the stock market recover, and when that happens, if you don’t want to ride out another correction or bear market, that’s when you want to change your allocation,” he said.
The state of the economy also has experts talking about the potential for a recession. Bouchey says we may already be in one, but this time, the slump looks different and will likely be short-lived due to the number of jobs available.
“Recessions usually don’t have that kind of a game plan where there are jobs, and not only are there jobs, there are good-paying jobs with great benefits because employers have had to do more to attract good workers,” Bouchey said.
The Fed takes the Consumer Price Index report into account, and is likely to raise interest rates at its next meeting at the end of July.