LOS ANGELES (CBSLA.com) — Financial experts say people who watched in horror as the Dow Jones Industrial average drop more than 1,000 points Monday morning should stay calm and not panic – a hasty move now could cause permanent damage later.
Within minutes of the opening bell, the Dow plummeted 1,089 points, the largest point loss ever during a trading day, on global fears about China’s economic slowdown.
“It does scare me of course, when I see it go down,” one investor in downtown Los Angeles said.
Analysts like Martin von Kanel pointed out that, despite the global fears about China’s economy, the U.S. economy actually showing signs of strength and growth.
“[From] ’07, ’09, the market’s down 60-something percent,” von Kanel said. “Now, ’09 to the present, we’ve experienced a couple of these 5 percent dips. Those are opportunities. Every time the market’s dipped down 5 percent, the markets have prevailed and gone up to the positive. If you weren’t in that situation to ride those waves, or had the winds in your sails – you’ve missed out.”
The stock market has suffered several drops over the past week, when the Dow closed at 16,459 Friday, a combined decline of 5.1 percent.
Even with the decline in the stock market, average investors should simply stay the course.
“For those with 401ks, this is not a panic mode, do not have a knee jerk reaction and go to cash, this is an opportunity to buy,” von Kanel said.