For U.S. households that own stocks, the first quarter of 2022 was a landmine. The stock market plummeted $3T, leaving many investors in the dust, especially those who heavily favored tech stocks. There is no secret that inflation is taking a choke hold on the country. The sticker shock at the pump and increased food prices have taken a toll on households nationwide. But surprisingly, not everyone is losing in this post-pandemic game. The disparity between rich and poor is lessening, as those who have often lived paycheck to paycheck have found more stable jobs and have been able to save more. The pandemic, war in Ukraine, inflation, and the stock market plummet have created a maelstrom clear as mud for the future.
The story is dismal. According to a report by the Fed released last week, U.S. household wealth experienced a $400B fall in net worth in the first quarter of 2022, from a record $149.8T to $149.3T. This is the first decline in household wealth since the first quarter of 2020 when COVID-19 stormed through the country.
According to Business Insider, “The Fed said the decline in wealth was driven by a “sizeable” hit to the tune of $3 trillion in the value of stocks on the balance sheets of households.”
Many experts think the trouble will continue for U.S. households. “The S&P 500 fell 5% in the first quarter of the year and is down 16% this year so far. The Nasdaq 100 fell 9% in the first quarter and is down 26% year-to-date.”
CNN reports an absolute debacle for tech stocks, which is responsible for much of the rapid descent. “Shares of tech leaders Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Google owner Alphabet (GOOGL), Facebook parent Meta Platforms (FB) and Elon Musk’s Tesla (TSLA) are all deeply in red. Netflix (NFLX), down more than 70%, is the worst performer in the S&P 500 this year.”
With the stock market falling, investors are waiting for capitulation, the moment that everyone has seemingly given up the ship. Once that happens, investors…