Normal buyers had a bad year last year. It was a year when stock prices fell sharply and interest rates increased.
But the worst of the damage from last year may be over now. And people who work on Wall Street are starting to think that now could be the time for stocks to start doing better.
A big worry for investors and business leaders is inflation. Inflation is caused by a complicated mix of output, money, and expectations, just like many other things in the business.
High inflation can be bad for the economy because it can cause prices to go up faster than wages. In that case, workers ask for higher pay to buy more things when prices go up.
But high inflation is also a problem for regular buyers because it can make the stock market move up and down. Because costs for everything from gas to mortgages can change because of inflation, it can be hard to invest.
In 2022, the rate of inflation worldwide was over 9%. This was the most inflation since the beginning of the 1980s.
This year, the Federal Reserve, or Fed, has raised interest rates more than once to fight rising prices. And these price increases are likely to keep happening through 2022.
These changes will make it more expensive for people to borrow money, especially homeowners who want to buy a home or refinance their debts. This could also affect savings and money market accounts, certificates of deposit, and car loans.
Rising rates also affect high-yield bonds, which pay more interest than most fixed-income assets. When interest rates go up, bond prices go down. This lowers the value of existing bonds and makes investment returns less good.
Russia invaded Ukraine in a big way in February 2022, which has led to tens of thousands of deaths on both sides and Europe's biggest refugee crisis since World War II. This is not just a military conflict but also a political and economic one. Russia's main goal has been to stop Ukraine from becoming a democracy and a strong, independent state.
Ukraine was able to fight back against the attack because its people believed that their country could give them a better future. It has also gotten help from countries in the West, which have given Ukraine military aid.
The Fed has started to raise interest rates quickly to fight inflation and take money out of the economy. It is doing this to get them to a level that will stop inflation from getting too high and causing a decline.
This approach has affected the whole financial system, increasing mortgage rates and home prices. It also makes people lose more of their funds, leaving them with less money to spend and pay off debt.
You can take steps to protect your money from the Fed's policy change, which is good news. First, print out your current financial records and keep track of your savings accounts and debt. Then, start keeping track of how much interest you're paying on those things.