The stock market has already entered into bear territory due to investors’ concerns over persisting factors like the multi-decade high inflation, deepening supply chain constraints, and the possibility of the economy witnessing a recession due to the Federal Reserve’s policy tightening. The benchmark SPDR S&P 500 Trust ETF (SPY) is down 18% year-to-date. Notably, the CBOE Volatility Index (VIX) has gained 77.2% year-to-date, reflecting significant market volatility.
Many analysts expect the lingering issues to result in further market pullbacks. According to Tom Galvin, a chief investment officer with City National Rochdale, "Investors should keep their seat belts fastened. This period of volatility is not likely to be over." However, long-term investors could take advantage of the current situation and bet on stocks possessing solid growth attributes on every dip instead of sitting on the sidelines waiting for a clear direction.
