Despite Volatile Stock Market, Experts Say Don't Panic With Your Money
MINNEAPOLIS (WCCO) -- It was another rough day on Wall Street.
At one point, the Dow plunged more than 500 points before bouncing back to close off by nearly 250. Plummeting oil prices and China's economic slowdown are dragging the markets down.
In just the last two months, Dow Industrials have dropped 2,000 points, or more than 10 percent. And some investors are starting to panic.
"It does make me nervous. I've decided not to look at my 401K so I don't worry about it," Donna Dye of Minneapolis said.
Whether you're invested or not, nearly everyone can feel the effects of a sluggish market.
"A couple years ago this happened. Everyone was selling off and large banks were liquidating," Jason Price of Woodbury said.
"We have seen a lot of volatility in a short amount of time. And that's pretty scary for people," Michelle Young, a financial adviser with Ameriprise, said.
Young said she's reaching out to her clients and telling them three things: Review your risk tolerance, make sure you're not all-in on one stock and perhaps her most important piece of advice is her simplest.
"Stay the course. So stay invested and just try not to look at your statement too much," Young said.
Young said moving your investments when the Dow is down could mean losing out in the long run. An Ameriprise chart shows where you'd be if you invested $100,000 in the S & P 500 index over the past 20 years.
"It would be worth about $654,000. If you missed out on those top five days, you would only have about $433,000," Young said.
Young said it's impossible to know for sure when the market will come back. In the meantime, she's hoping people invest in patience.
"Although it's painful to see your hard-earned savings go down, if we just stick through this it's going to be better off in the end," Young said.
Speaking of when the market will recover, experts say the market isn't likely to stabilize until oil hits bottom. Crude oil crashed below $27 a barrel on Wednesday.