Financial advisor says stock market plunge "kind of normal" amid recession fears
BOSTON - It was a scary Monday for those who watch stocks closely and those who have retirement funds tied up in 401k accounts. No matter how much financial experts urged people not to panic, it happened. "It definitely does worry me as a young person," said Jack Garbarino sitting on a bench in Boston's Financial District. "The money that I put away now, I want the most return on it," he said.
The stock market plunged under the pressure of a global market selloff, all because of a dismal unemployment trend. "It's funny, this is the first time that I've had stability in a job," said Michelle Billarreal. "So now I'm like, I don't have stability?"
"This isn't some bug in the system"
"Unfortunately, this isn't some bug in the system," said financial advisor Michael Armstrong with Armstrong Advisory Group. "This is just kind of normal for equity markets, and it's just feeling weird cause we didn't have it in 2023."
He said context is important. The current dip is nothing we haven't seen before and does not necessarily mean we're headed into a recession.
But many wonder if the wild detours of the current political season are playing into it all. "There's a lot of uncertainty in the U.S. right now, and I mean faith is such an important factor when you're investing," said Garbarino.
There are some other things that can motivate people to spend, even in the midst of uncertainty, such as lower interest rates, and lower stock process. "Off of the few summer jobs that I've had, I'm trying to take that money and invest it in some of these things," said Ross Rider, a student visiting Boston from Pennsylvania. "We're getting all these things at 25% off, 10% off. We're getting great deals on these companies that are going to recover," he said.
Time to check accounts
Armstrong says it's a good time for people to check accounts and question how they can best prepare for a possible recession just in case it comes to that.
"I think the important thing to be asking yourself right now, assuming you're not a hedge fund manager with billions of dollars, is, have I thought about this type of event, and how my portfolio is supposed to react to it," Armstrong said. "If I'm working with a professional, have they addressed the possibility of a recession?"