Lucas Daignault likes to glance at his E*Trade account before school or after his shifts at the supermarket. More days than not lately, it shows a sea of red.
Mr. Daignault, who just turned 18 years old, is mostly invested in a fund that tracks the S&P 500. The index is off to its worst start to a year in more than five decades, but he tries not to dwell on it. His strategy is to put about $500 a month into his brokerage account, and he has no plans to stop.
“If just by staying in the market, I can make more money than anyone trying to time the market, I’m definitely going to do that,” said Mr. Daignault, who graduates on Sunday from Newburyport High School in Newburyport, Mass.
Every trader has to live through his or her first market meltdown, and the current one is a doozy. Last week, beleaguered investors finally got a reprieve when market gains snapped what had been the Dow Jones Industrial Average’s longest multiweek losing streak since 1932. Retailers such as Macy’s and Dollar Tree reported strong sales and helped fuel a rally, though executives at some chains warned that their customers are starting to feel the pressure of higher prices everywhere.
Meanwhile, the Federal Reserve’s attempts to curb red-hot inflation are forcing investors to digest the possibility the U.S. could head toward a recession. The central bank has raised interest rates twice already this year and plans to keep doing so. Even with last week’s gains, the S&P 500 is down 13% for the year.
Conventional wisdom says that stocks go up over time. But during market plunges, even seasoned investors can have a hard time remembering that.
For Mr. Daignault, there is little memory to draw upon. He was 4 years old when the stock market crashed in 2008. He was a sophomore when it tanked during the first stretch of the pandemic, but that crash lasted only 23 trading days.
When Mr. Daignault started investing last year, the meme-stock frenzy was in full swing. Rookie day traders were plunging into stocks such as GameStop and celebrating with emoji-laden tweets. Mr. Daignault’s friends started swapping screenshots of gains and losses in long text-message chains. Though he has mostly stuck with the index fund, Mr. Daignault sometimes dabbles in individual stocks.
A minor at the time he opened the custodial E*Trade account, Mr. Daignault needed a signoff from his mother, Anne Katsas. Ms. Katsas, an estate planner, can log in and review her son’s trades, but she rarely does.
Instead, for his 17th birthday last year, she bought her son a copy of Burton Malkiel’s “A Random Walk Down Wall Street,” a classic text that encourages long-term index investing, and pushed him to chart his own path.
“The right investments for him are not necessarily going to be the right investments for me,” Ms. Katsas said. “If he makes mistakes, I feel they’ll be his to learn from.”
Making money in stocks hasn’t been easy in 2022. For some people new to the markets, the broad selloff this year has lent investing a darker tone. Anxiety has forced Roz Broch, a Massachusetts librarian, to limit how often she checks her account.
Ms. Broch opened an IRA and brokerage account in early March with Betterment, a personal-finance company, after colleagues suggested that her pension wouldn’t be enough for retirement. Even with regular monthly contributions, her portfolio is in the red this year.
“Every time I open up that app, and the money I put in gets lower and lower and lower, I can’t help but wonder, ‘Oh, OK, this might not be the right move,’” said Ms. Broch, 38.
Ms. Broch had hoped that gains from her brokerage account would help her buy a house. Now, she is thinking she might have to get a second job instead. Her rent is scheduled to shoot up 10% this summer. She wonders if she should just pull the money out.
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Ben Glover, a 19-year-old college student from Seattle, tries not to think about the turmoil in stocks. Mr. Glover started putting money into the market after the Covid-19 crash in early 2020, favoring actively managed mutual funds. He set up direct deposits from his internship in software sales so that he wouldn’t be tempted to cut bait.
“It’s way harder to be staring at it lately,” Mr. Glover said. “I’ve tried to just take a very laissez-faire approach, not look at it or touch it.”
Mykail James, a program scheduler at a defense company in Washington, D.C., opened an Ally Financial brokerage account in April 2020, when she was saving money by not commuting or eating out. She funneled it into diversified exchange-traded funds and index funds.
Ms. James, 26, has a side business as a financial educator, giving workshops about investing. She said she isn’t too worried about losing money in the market’s current downturn. She doesn’t plan to buy a house soon and has already been to graduate school, so her goal is to be able to leave a traditional 9-to-5 job.
Mr. Daignault, the Massachusetts high-school student, fits investing into a jam-packed schedule. Now that senior-year classes have ended, he plans to work as many as 80 hours a week this spring between his job as an assistant checkout manager at the Market Basket grocery store and another gig as an elementary-school substitute teacher.
“I guess I’m a bit of a workaholic,” he said.
This year, investing has been a bumpy ride. Mr. Daignault’s account has lost about $1,200 so far in 2022, a negative return of about 13%. Still he is confident that in the long run, his investments will go back up.
Mr. Daignault will head to Bentley University in Waltham, Mass., this fall. He plans to study finance.
Write to Matt Grossman at matt.grossman@wsj.com
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