How to Navigate a Down Market

If there were a prize for living through unprecedented events, millennials might win first place. Older millennials entered the job market during the Great Recession and have since experienced a devastating pandemic and a spike in inflation not seen in 40 years.

- Rivan Stinson

On top of that, the Federal Reserve's moves to tame inflation have sent the stock market into a tailspin.

The S&P 500 index officially fell into bear-market territory on June 13, when it dropped 21.3% from its earlyJanuary high. (A bear market occurs when a broad market index falls 20% or more from its peak.) After a summer rally, stocks dropped again in September, and as of October 7, the S&P 500 was down 23.2% from its peak.

This series of unfortunate events is leading some younger investors to pull money out of the stock market or shut down their brokerage accounts entirely. According to a recent survey by Ally Financial, nearly 20% of investors closed a brokerage or investment account over the past 12 months, and of those, the largest group-more than 20%-consisted of millennials and Gen Zers.

Seeing my retirement savings shrink since the beginning of the year has made me queasy. But for me, closing my account is a nonstarter.