Not only we in the financial industry are tested during market volatility, but investors such as yourselves are also. Chances are those of you reading this are aware of the market action yesterday, with the Dow Jones Industrials, one of the hallmarks to watch (even though it is only 30 stocks) going down 1175 points. On TV, all over the internet, on smart phone bulletins, it couldn’t be escaped. I watched cable news yesterday between work, tuned in last night, read financial news sources and listened to the radio coming in this morning, and this is what I heard and saw:
It was a FREE FALL
Stock Market COLLAPSE
Worst one-day and intraday point losses EVER
What makes it even worse are the reasons given. I listened to a call-in show on the radio and callers were saying things like “This economy isn’t really strong. It’s a fake economy. The markets are way too high. This is the beginning of the end! The stock market was propped up artificially.” And on and on and on.
I’ve been itching to get a moment to address this.
Yesterday’s market moves were hardly historic. The move wasn’t even in the top 20 down days. Back in October 1929 the crash was a drop of 12+% . One day I will always remember is October 19, 1987 when the market dropped over 22%,
Do you know how much percentage-wise the Dow dropped yesterday? 4.6%
It only makes sense to compare percentages. Points don’t tell the story.
But that doesn’t make a good story for the news. Nor does letting you know that we were overdue for a correction and we will have more. That’s a healthy market. We are in a strong economy.
The stock markets cannot just continue to go up without a breather, investors taking profits, and yes, people getting nervous.
So, we are all being tested. I must say with the few hundred clients we have I am pleased that we haven’t had frightened investors calling us in need of reassurance, not one. Hopefully, that means we have done our job educating them of the facts, that it is best to ride these rocky times out, and that it is time in the market that makes all of us successful.