![]() While you should leave enough money in an easily accessible savings account to cover emergencies - between three to eight months' of minimum expenses - any cash above this can be put to better use. "Leaving too much money in bank accounts or money market accounts that barely pay any interest can destroy savings," said Carey. Diversification can smooth the ride over the long term, especially in volatile markets." Don't let your money depreciate in savings accountsĪlthough some high-yield accounts have begun offering savings rates of 2% - 3%, most are still hovering close to 0%. Diversification is about hitting those singles and doubles versus trying to hit a home run. "They say in baseball that it's all about the singles and doubles. "Stay diversified within multiple asset classes and sectors," he said. Rather than putting all your eggs in one basket, try diversifying your investment portfolio, said Odhrani. "No indicator paints the entire picture, but tamer P/E's are generally considered to be a better time to invest than buying into inflated valuations." "We're seeing that the P/E ratios are much more in line or actually below historical averages for most things, which bodes really well for the future," said Kirill Semenov, CFP at Intellicapital Advisors. A high P/E ratio usually indicates a growth stock, though it could also mean a stock is overvalued. P/E ratios compare a stock's current price with its latest earnings per share, and they tend to be pretty reliable indicators of where the market is headed. Still, the latest data on price-earnings ratios have experts feeling optimistic. At the same time, Johnson noted that any unforeseen circumstances, like another wave in the pandemic or global conflict, can derail that. Robert Johnson, CEO of Economic Index Associates. "If inflation abates due to the aggressive actions by the Fed, I think we will witness reasonable returns in the stock market over the next year," said Dr. "History shows that as soon as it is very clear the economy is in a recession, that is when the recovery begins," said Carey. Historically, after inflation starts to cool, the Fed begins lowering interest rates and the stock market begins to bounce back. It's not all doom and gloom into 2023, however. Signs hint at a market recovery next year "Anybody who tells you they know what is going to happen, you probably should run as far as you can in the other direction," said Breeding. While experts can provide some predictions based on previous market trends, don't rely too heavily on forecasts. ![]() But she also warned: "I don't have a crystal ball. ![]() For example, market volatility could taper off if inflation settles and the Fed starts to ease off its rate hikes, said Sonja Breeding, CFP and vice president of investment advice at Rebalance. If there's one constant you can count on in the stock market right now, it's volatility.ĭon't anticipate much change in market volatility over the next six months since the threats to economic growth remain the same - namely, the war in Ukraine, the energy crisis in Europe, global inflation and supply chain issues, among multiple climate disasters, said Odhrani.Īnd what happens with inflation will play a big role in changes in the market. We're seeing that the P/E ratios are much more in line or actually below historical averages for most things, which bodes really well for the future." - Kirill Semenov, CFP and wealth adviser at Intellicapital Advisors, LLC. CNET One stock market indicator bodes well. ![]()
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