Sentiment on Main Street is at its lowest level since we started keeping track in the mid-1970s. It’s no wonder retail investors who have given up on the economy are selling stock to ride out tough times ahead.

For retirees, just one day like this can wipe out most of an annual required minimum distribution. That’s theoretically an entire year of living expenses, up in smoke.

And then you’ve got the knowledge that the cost of living itself has surged 13% in the last two years. If your investments haven’t kept up with that, you’re falling behind. When your retirement account is down 20% from its peak, it feels like drowning.

I get it. But remember, we’ve already lived through what could have been a full-fledged apocalypse. Back in 2020, a little more than two years ago, the S&P 500 plunged 32% in five weeks because nobody knew how a global pandemic would end.

If not for trillions of dollars in newly printed support money, I doubt the crash would have ended at 32%. We would have seen credit markets freeze in a repeat of the 2008 crunch, when half the market’s value evaporated in a dizzying five-month lurch.

The Fed learned from that mistake. We didn’t see another Lehman Brothers implosion two years ago. Instead we got a helicopter dump of easy liquidity designed to keep companies solvent, keep cash flowing and keep American workers employed.

Remember that? The pandemic was an actual doomsday scenario, with stocks plunging 7-8% from day to day and triggering circuit breakers that prevent outright panic. And the 2008 recession, barely a decade ago, was the financial equivalent.

This is an actual, sincere gut check. What about the world has gotten tangibly worse than it was two years ago?

It’s not corporate fundamentals. While some companies are in worse shape than they were going into the pandemic and other stocks have gotten ahead of their growth rates, in the aggregate the market is stronger than it was in February 2020.

A recession may be coming, but a recession is usually just a few years away. For now, Bank of America says consumer credit is holding up fine. The Fed says Americans have too much cash to cushion any shocks.

Has society deteriorated? That’s not normally a factor Wall Street cares about. Buzz and bluster come and go, but until we see real policy shifts enacted into law, it’s all just talk.

The dollar is practically too strong for comfort. And while interest rates are climbing fast, we’re probably another three months away from hitting the 2019 peak on that side. It’s hot . . . but again, it was hotter before the pandemic.

Or are you just tired of volatility? That’s okay. The VIX is spiking again and we haven’t gotten down to “normal” in the last two years. Too long a ride on the rollercoaster will break anybody’s nerve.

And we’re all two years older. If you want off the rollercoaster, there are always smoother glide paths. Dividend stocks. Deep value. The quiet grind of short-term options trading, netting a few percentage points a week even when the market itself stalls.

The Bottom Line

Most key stocks are up at least 8-12% from where they were at the pre-pandemic peak. Names like American Express (AXP), IBM (IBM), Home Depot (HD) . . . even Target (TGT), which has cratered so hard lately.

They’ve done about “average” historically across the two years. That’s a good thing. If these stocks can weather some of the most unsettled years in living memory and still produce an “average” return for investors, where is the pain point?

Smaller companies are holding up decently. The Russell Small-Cap index (IWM) is 13% above its pre-COVID high. All in all, it’s made progress in these last two wild years.

The base keeps rising . . . unless you’re tired of watching, or you have compelling evidence that something essential has changed in the economy. People said that in the 1970s as well. Malaise got thick.

But we got through it. If you see a stock priced below its pre-pandemic level, this is probably the kind of dip you can confidently buy and hold until the market mood recovers.

I’m thinking of Walmart (WMT), which is right where it was before COVID. Is WMT any less efficient today than it was two years ago?

And I’m thinking of the financials. JP Morgan (JPM) and Bank of America (BAC) leap to mind. They’re below their 2020 peak now, wiping out two full years of progress. Think back to January 2020. they feel weaker now than they did then?

Even if you’re worried about the banks, what about Visa (V)? Has the company rewound the last two years . . . or are the plastic payment networks in a stronger global position now compared to old-fashioned cash?

Sometimes, of course, the dip is deserved. Amazon (AMZN) is below its 2020 peak because while home delivery has boomed, the company itself is a lot less efficient. I think this stock has run out of runway.

Consider: on a trailing basis, AMZN earned $5.63 per share in the year leading up to the brink of the pandemic. Now margins have deteriorated to the point where we expect the current year to deliver barely 1/8 that amount of profit.

Next year looks like another “rebuilding” year at best. I don’t see AMZN supporting its 2020 stock price before 2024 at the earliest . . . assuming of course that everything goes perfectly.

There are plenty of stocks to buy. Skip that one for now.