SEATTLE — This week the S&P hit a bear market, meaning it was down more than 20% from its most recent all-time high. The Fed also announced a spike in interest rates. It's a combination that's creating uncertainty.
"It's really a time to reevaluate as opposed to a time to worry. The worst thing that someone can do right now is panic. Panic selling never ends well," said Adam Droker who is the Chief Investment Officer at Waterrock Global Asset Management.
Droker said retirees and those with all of their money invested in the market will be most affected by this bear market. When it comes to inflation, that will trickle down to everyone.
"Risk right now is very critical to know what you're taking and take it strategically," said Droker.
In a market of this type, high growth stocks are being hit extra hard.
"When you have a fast growth company, that usually means that you're not yet mature," said Dr. Ying Li, an associate professor of finance at the University of Washington Bothell.
Tech companies or startups are dictated by future growth, many fall into that high growth category.
"Most high tech companies grow fast and especially in this case," said Li.
King County is full of startups. "There's a dip right now but over time the good projects that are being built in this winter will stand out just like in the dot com boom where the pets got erased from the map. But then there were the Amazons that dipped 90% and now are stronger than ever," said Genzio founder Zachary Nelson.
It's being called a Crypto winter, but it's not something Nelson is afraid of. His company works in crypto marketing development and community engagement. They started it six months ago and have already won awards for marketing with companies like Skittles.
"That's part of the reason why web-3 and our business is doing very well when at the same time web-2 or like Netflix-type companies are seeing massive layoffs and stock shocks while we are hiring alternatively," said Nelson.
Web-2 is the internet we know today where you use a company's service and they own your personal data, Web-3 is essentially where you own your own data.
It's banking on the future, one that at this point is unknown. What all of our experts say is that the high inflation is causing this trend. Droker said the inflation is due to the supply chain issues we've seen since the pandemic.
"Once we start to see the negativity of supply chain issues start to ease, we'll see that inflation go down," he said.
Droker says the worst thing you can do right now is panic sell, going on to say it never works out.