YORK, Pa. — The stock market started the day on Monday with a big drop before making a comeback just before the closing bell. The volatility of yesterday’s eventful day caused a little panic.
U.S. stocks started in red Monday morning, with the Dow Jones dropping more than 1,000 points. What caused this sudden change?
“There’s a lot of concern about the federal reserve meeting going on this week," said Terrill Frantz, an E-Business professor at Harrisburg University. "There’s concerns about inflation, and you know, you can’t leave out the geopolitical issues coming up really, really fast – and let’s not even forget about COVID-19."
By the end of the day, the market made a huge recovery, with the Dow closing in green at 99 points higher. Although the day resulted in a happy ending, Monday's unpredictability had some concerned.
“In my view, many people are starting to get nervous about that, and they’re starting to reduce their risk quite a bit," said Frantz.
However, experts say there is no reason to panic.
“I don’t think there’s a cause for alarm," said Dmitriy Krichevskiy, an associate professor of economics at Elizabethtown College. "I don’t think there’s a significant reason to rethink a strategy. A healthy investor is a person who looks at the economy, and the economy has been doing well and has been recovering quite steadily."
Instead, people like Krichevskiy say investors should have a long-term financial plan in place.
“Not over-emphasizing certainly one day, not one month, not one quarter, not one year," said Brad Newman, the lead financial advisor at Fort Pitt Capital Group in Harrisburg. "The real key is to try to...adequately assess your risk and then develop your overall strategy around that risk level and then stick with that."