Newsmax TV & Webwww.newsmax.comFREE - In Google Play
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
Skip to main content
Tags: boomers | crypto | usd

Policy Disasters, Market Plunges Hammer Young Investors

young investors burned b y bad policy and poor markets

Clara Del Villar By Thursday, 14 July 2022 09:40 AM EDT Current | Bio | Archive

For years, stock and bond markets have only sailed upward. Inflation remained steady at between 2% and 3%.

Everyone was certain this trend would continue for the foreseeable future.

Also, the red-hot cryptocurrency market was skyrocketing ever higher, seeding new digital tokens and fortunes with increasing frequency.

That is, until 2022.

A multi-trillion-dollar gusher of federal funding during COVID and years of easy monetary policy, combined with the post-pandemic American consumer anxious to spend, spend, and spend, created an inflation shock. In May, the U.S. inflation rate reached 8.6%, the highest in 40 years.

The market correction had arrived.

The S&P index turned in the worst first half of year return since 1970.

That index remains down almost 20%.

The tech heavy Nasdaq is down 28%. Crypto has gotten crushed this year with Bitcoin plummeting 58% and Ethereum USD, the 2nd largest cryptocurrency, down 71%.

We're in a crypto winter indeed.

Dramatic downswings are not unfamiliar to most baby boomers, who have lived through many ups and downs over the decades. Still, this doesn’t make plunging portfolio valuations for retirees or near-retirees any easier to bear. They are rightfully discouraged or even panicked by painful blows to accumulated nest eggs.

But there isn’t as much focus on the long-term impact of repeated, prolonged market slumps or lingering inflation on our younger generation's welfare.

The market downturn coupled with historically high inflation, with the June CPI now at 9.1 %, will surely damage the younger generation's savings and outlook.

Young folks with decimated investment accounts are prone to lose confidence in unstable markets and become cynical watching clueless policy makers.

The real danger is a disheartened generation delaying valuable years of compounding returns for nest eggs. They also face much bigger challenges with their cost of living: housing, healthcare, and student debt.

Tuition for children is skyrocketing, showing no signs of leveling off.

These younger generations will be paying for our boomer retirement needs, bankrolling the increasing cost of Medicare, Social Security, Medicaid, and caregiving expenses during their careers while they struggle to raise families.

Unfortunately, few political leaders today are focused on tackling this issue.

Many young people were already concerned about the size of their retirement nest eggs before getting hammered in the markets over the last year.

Younger savers have long favored the technology sector and crypto currency investments, but those sectors have been pummeled in 2022. How can the anxiety of our younger generations not have ratcheted up several notches since?

A recent survey indicated that millennials ages 25 to 40 were just as likely to be invested in cryptocurrency (38%) as they are the stock market (37%).

In fact, a large portion of millennials (25%) as well younger generations expect crypto assets to fund their future retirement.

Before the market dive, millennials had an average of $51,300 in personal savings.

Their retirement accounts had an average balance of $63,300, according to Northwestern Mutual's 2021 Planning & Progress Study.

Now is a critical moment to support young investors with better tools in addition to encouragement, insight, and honest, jargon free information.

Below are a few time-tested suggestions:

1.) Focus on investing consistently and regularly through up and even down markets, as difficult as it might be. Even very small amounts invested during a recession can make a difference in future returns.

2.) Get educated if you don’t have access to a financially savvy relative, friend, or colleague. The financial industry is as much a hyped-up marketing machine as it is a magnificent wealth creation engine. Take a low cost online financial investing class so you know what you are doing and can differentiate better between opportunity and . . . manipulation.

3.) Volatility will always be a market investment feature. Use common sense and seek advice when taking advantage of new opportunities. This is when a boomer might come in handy.

The future will definitely be more expensive, placing an enormous burden on younger generations. But the good news is that technology innovations will continue to provide a bright future for healthy, prosperous lives as well as portfolio returns.

Acceleration of financial literacy programs across the country will also help to better prepare young people for an economic future that doesn’t drive them — unfairly — into the ground with the massive debt burdens created by older generations.

Clara Del Villar is Director of Senior Initiatives at FreedomWorks Foundation. Her financial industry career includes senior roles in Investment Management, Private Asset Management, and Capital Markets. She is Founder and CEO of The Hispanic Post, and founded InEnergy. She is a former adviser at 60 Plus Foundation. Currently, Ms. Del Villar is a Board Director at General American Investors Co. and on the Executive Committee of Weill Cornell Women's Health Symposium. Read Clara Del Villar's Reports — More Here.

© 2023 Newsmax. All rights reserved.

The future will definitely be more expensive, placing an enormous burden on younger generations. The good news is that technology innovations will continue to provide a bright future for healthy, prosperous lives as well as portfolio returns.
boomers, crypto, usd
Thursday, 14 July 2022 09:40 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.

Interest-Based Advertising | Do not sell or share my personal information

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
© Newsmax Media, Inc.
All Rights Reserved
Download the NewsmaxTV App
Get the NewsmaxTV App for iOS Get the NewsmaxTV App for Android Scan QR code to get the NewsmaxTV App
America's News Page
© Newsmax Media, Inc.
All Rights Reserved