The Dow plunged nearly 1,600 points at one moment today, but it then recovered a bit. Some people may be worried now; however, one financial planner says those with long-term investments don’t need to worry.
Today’s Dow plunge was a continuation from last week’s decline. One financial planner says after such a great year last year, this is to be expected.
“So this year’s certainly a correction that’s taking place with the market,” Blayne Andersen, a certified financial planner for BANDER Investments, said. “Although it’s been a little while since we’ve experienced one to this size, it is very natural and something that takes place within our stock market.”
The technical correction that occurred is often triggered by an emotional reaction to something that takes place in or outside of the country.
“It’s usually a short term correction,” Andersen said. “And it’s often times where we see steep and sharp declines like we’ve experienced today and this past week.”
This can also have a potential impact on interest rates.
“It is the belief of many, including mine, that interest rates will increase over this next year,” Andersen said. “And as a result of that, we’ll likely see some short-term volatility and corrections like we’re experiencing now.”
Andersen says this creates an opportunity to invest money you have sitting on the sidelines. It’s also a good time to take a look at your financial plans.
“I feel that this is something that causes all of us to stop for a minute, take a look at our investment objectives, make sure that they’re in line,” he said. “And that it should not detour the long-term investor from seeking and pursuing their investment goals and their retirement plans.”
Again, Andersen says there is no real cause for concern for long-term investors. He does believe that it will be difficult to top last year’s gains, but the economy is still moving forward.